South Korea's $23 Billion Fund: A Game Changer for Battery and Biotech Industries

South Korea has announced a $23 billion fund to support the growth and innovation of its battery and biotech industries, a move that could significantly enhance the country's global competitiveness in these high-value sectors. The Advanced Strategic Industry Fund, to be established within Korea Development Bank (KDB), will focus on providing low-interest loans and equity investments to these critical sectors, with a particular emphasis on batteries and biotechnology.

The fund's establishment comes amid concerns that Korea's advanced industries could face challenges due to potential policies of a second Trump administration, which may prioritize America First strategies. In response, the South Korean government is taking proactive steps to ensure its industries remain competitive on the global stage. Acting President and Deputy Prime Minister Choi Sang-mok emphasized the government's commitment to these sectors, stating, "We will establish a tentatively named 'Advanced Strategic Industry Fund' within the Korea Development Bank to support advanced industries and technologies such as batteries and bio."

The fund's focus on batteries and biotechnology aligns with South Korea's broader economic policy framework, which has historically prioritized high-tech sectors like semiconductors and electronics. This alignment is likely to ensure that the fund's activities are well-integrated with other government initiatives and have a positive impact on the national economy.



For the battery industry, the fund will support the expansion of domestic EV production and sales, as well as the development of next-generation batteries. This includes the establishment of a production plant for advanced batteries by 2030, which will be led by the country's top three EV battery makers: LG Energy Solutions Ltd (LGES), Samsung SDI, and SK On. The government aims to increase its domestic production capacity of cathode material by four times and expand its battery production-related equipment exports by at least three times to $3.5 billion in the next five years. By 2025, South Korea will focus on securing advanced batteries such as lithium ferro phosphate batteries, and by 2027, it aims to commercialize solid-state batteries. These efforts will help South Korea maintain its position as a global leader in the battery industry and strengthen its competitiveness in the global market.

In the biotech industry, the fund will support the growth and innovation of the biopharmaceutical industry, which accounts for the lion's share of the biotech industry. The government aims to make Korea the 6th largest pharmaceutical and biotech powerhouse in the world by developing a world-class biopharma industry. The Comprehensive Plan to Promote the Biopharma Industry contains four supportive strategies and 10 major tasks to achieve this goal. These efforts will help Korea become a global leader in the biotech industry and strengthen its competitiveness in the global market.



In conclusion, South Korea's $23 billion fund is set to have a significant impact on the global competitiveness of its battery and biotech industries in the long term. By supporting the expansion and innovation of these industries, South Korea will be able to maintain its position as a global leader and strengthen its competitiveness in the global market. The fund's alignment with South Korea's broader economic policy framework and its potential spillover effects on other sectors further enhance its potential impact on the country's overall economic growth and competitiveness.