S. Korea to expand economic security items to 340, shore up supply chain weak links

The government will expand its list of economic security items from 327 to 340 by adding key products in advanced industries such as semiconductors, renewable energy and aerospace.

About 100 items deemed to require preemptive responses to supply chain risks will be designated for intensive management, and the government plans to step up support for securing overseas production bases, stockpiling strategic materials and diversifying import sources.

Deputy Prime Minister and Minister of Economy and Finance Lee Hyung-il said Monday at a Supply Chain Stabilization Committee meeting at Government Complex Seoul that supply chain instability has become a structural risk requiring constant management rather than a temporary variable, as uncertainty in the external environment grows amid intensifying global technology competition and the prolonged war in the Middle East.

"Just as the strength of a chain is determined by its weakest link, we will concentrate our policy efforts on proactively identifying and reinforcing the vulnerable links in our supply chains so that they can withstand external shocks," Lee said.

The government will first strengthen the link between supply chain structural improvement policies and the Supply Chain Stabilization Fund to expand the fund's role. Since its launch in September 2024, the fund has provided 17.4 trillion won ($13 billion) across 153 cases.

Going forward, the government plans to establish new support programs for strategic stockpiling and import diversification, and to increase investment in overseas production base projects that are critical to supply chains but difficult for the private sector to undertake alone. The investment will draw on 200 billion won earmarked in next year's government budget proposal.

The management framework for economic security items will also be overhauled. Key products in advanced industries — including semiconductors, renewable energy and aerospace — will be newly designated, expanding the list from 327 to 340 items.

The existing three-tier rating system will be replaced with two categories: intensively managed items and generally managed items. About 100 items — centered on critical minerals, materials, parts and equipment, and essential goods for public welfare — will be selected for intensive management based on the need to preemptively address external risks such as export controls.

Intensively managed items will be subject to enhanced monitoring through a cross-ministry integrated early warning system scheduled for a pilot launch in November. These items will also receive strengthened financial and tax support, including a preferential interest rate of up to 2.3 percentage points from the Supply Chain Stabilization Fund.

The government will also pursue supply chain stabilization through the acquisition of critical technologies. It plans to use big data from about 600 million global patents to identify alternative suppliers for items and technologies heavily dependent on specific countries, and to support technology transfer strategies to domestic companies through collaboration with Korean research institutions.

Supply chain-related companies will receive technology diversification information based on patent analysis, while firms in need of technological advancement will be supported with patent creation strategies to secure promising patents. The government will also build industry-specific "supply chain patent strategy maps" to identify areas requiring technology acquisition and patent preemption, which will inform future industrial strategy development.

The government will also improve the consignment stockpiling management system for automotive-grade urea. Safety stock will be set at 70 percent to ensure stockpiles can be deployed immediately in the event of a supply chain crisis, and on-site inspections will be strengthened. A portion of the stockpile will be held and managed directly by the government.

Companies participating in the consignment stockpiling program will also be offered expanded emergency lending and sales support during supply chain crises, along with additional payments for storage and inventory rotation costs, to encourage private sector participation.

On the prolonged instability in the Middle East, Lee said the government needs to thoroughly review its response capacity. "We will closely monitor supply and demand trends for crude oil and naphtha, and swiftly devise additional countermeasures if necessary," he said.