What They Say
Business Korea reports that the South Korean government is considering designating OLED as a ‘national strategic technology’. There are currently 34 such technologies including advanced semiconductor, vaccine and EV battery.
The corporate tax deduction related to facility investment is 16% for small and medium-sized enterprises, the paper said, 6% for large enterprises, and 8% for those between them. A 4% deduction is added in the event of investment for facility expansion.
When it comes to the R&D-related tax deduction, the rate is 40% to 50% for SMEs and 30%-40% for others. These are much higher than those applied to non-strategic technologies, which are 2%, 25% and 8% for large enterprises, SMEs, and those between them, respectively.
What We Think
I’m surprised that OLED wasn’t already a special technology for the Korean government. Years ago, when I was at IMID, a speaker from the Korean Government at the time was very clear that the display industry (then LCD) was central to the economy. No doubt there have been plenty of informal bits of assistance in planning or infrastructure over the years.
A few years ago I mentioned to a Japanese friend that I was sometimes surprised to see very expensive products being launched. I think the one in question was a 50″ Sharp TV that used 3 panels and rear projection and that cost $50,000. I didn’t expect many to be sold, but my friend told me that at that time, in Japan, you could get a big rebate on your R&D costs if you actually brought a product to market. That meant that companies had a good reason to actually have a product in the market, even if they sold very few. (BR)
