The government said on the 9th it will designate next-generation Power Semiconductor and liquefied natural gas (LNG) cargo containment technologies as national strategic technologies. Once designated as national strategic technologies, the tax credit rate for research and development (R&D) expense will be expanded from a maximum of 25% to 50% for small and midsize enterprises.
Next-generation Power Semiconductor are high-efficiency power control devices used in electric vehicles and renewable energy installations, a technology that reduces power loss and improves energy efficiency. LNG cargo containment is a key facility that safely stores and transports natural gas as a cryogenic liquid at minus 163°C.
The Ministry of Economy and Finance announced the "2026 economic growth strategy" on the day. The current tax credit rates for research and workforce development expenses for general technologies are up to 2% for large companies, 8% for mid-tier companies, and 25% for small and midsize enterprises. However, if the Ministry of Trade, Industry and Resources designates them as national strategic technologies, large and mid-tier companies receive 30%–40%, and small and midsize enterprises receive 40%–50%.
The government will also designate graphene technology and special carbon steel as new growth and original technologies. New growth and original technologies also carry higher tax credit rates than general technologies: 20%–30% for large and mid-tier companies, and 30%–40% for small and midsize enterprises.
Graphene is a new material made of a single layer of carbon atoms, and is considered to have high potential for use across semiconductors, batteries, and advanced materials due to its excellent strength and electrical and thermal conductivity. Special carbon steel is made by adding alloying elements to ordinary carbon steel and is characterized by higher durability and heat resistance than steel. Demand is expanding in energy, defense, and advanced industries.
In the petrochemical sector, the government will designate as new growth and original technologies the technology to recycle brine wastewater generated in the secondary battery manufacturing process and the development of eco-friendly refrigerants.
In the steel sector, hot-metal blending technology and digital image analysis-based ferrous scrap grading and selection technology will be added. Hot-metal blending is a technology that mixes hot metal (pig iron) from blast furnaces with molten steel from electric arc furnaces in steelmaking, enabling the production of high-grade steel while reducing carbon emissions. The ferrous scrap grading technology uses artificial intelligence (AI) and image analysis to increase the utilization of recycled feedstock.
Meanwhile, along with tax support, the government plans in the mid to long term to expand the national R&D budget to around 5% of total expenditure. In 2026, 35.5 trillion won (4.9%)—an increase of 5.9 trillion won from 2025 (29.6 trillion won, 4.4% of total expenditure)—has been set as the R&D budget.