Lawmaker pushes gift-tax exemption to boost semiconductor materials testing infrastructure

Rep. Bok Ki-wang of the Democratic Party of Korea, who represents Asan-gap in South Chungcheong Province, said Friday he had introduced a bill to amend the Restriction of Special Taxation Act that would temporarily exempt from gift tax private contributions made to build demonstration infrastructure, enabling semiconductor materials, components and equipment companies to apply their research and development results to actual manufacturing processes.

The semiconductor industry is central to the national economy and security. As global supply chains are restructured and competition in advanced industries intensifies among major countries, the need for national-level support to build a stable supply chain and achieve technological self-reliance is growing.

According to Bok, even after semiconductor materials, components and equipment companies develop new technology, they must go through a lengthy separate process of testing, evaluation and reliability verification before that technology can be applied to actual semiconductor manufacturing processes. Small and mid-sized companies in the sector, however, often cannot afford to build costly demonstration facilities or bear the large expenses involved, meaning hard-won technology frequently fails to reach commercialization or market entry.

The bill would exempt from gift tax contributions made to corporations established to support research, development and demonstration for semiconductor materials, components and equipment, provided the contributed assets are used directly for research, development, demonstration, and the construction and operation of related facilities.

In addition, the bill includes post-management provisions to ensure the tax benefit does not simply facilitate asset transfers. If contributed assets are used for purposes other than research, development or demonstration, or if the legally required conditions are not met, the recipient would be required to file and pay gift taxes. The exemption would apply only to assets contributed by Dec. 31, 2031, concentrating the incentive to drive private investment in demonstration infrastructure during that window.

"The competitiveness of the semiconductor industry does not end with simply developing technology — it depends on whether that technology can be verified in actual production settings and connected to mass production," Bok said. "For small and mid-sized materials, components and equipment companies that lack funding and facilities, the demonstration stage is one of the biggest barriers to entry." He said the bill aims to link privately held assets and capabilities into shared demonstration infrastructure, creating a virtuous cycle from technology development through demonstration, commercialization and mass production. A temporary gift-tax exemption, he added, would actively draw in voluntary private investment and contributions, helping stabilize the semiconductor supply chain and advance technological self-reliance in the materials, components and equipment sector.