South Korea Industry Seeks 20% Tax Credit for AI Data Centers

South Korean technology companies urged the government to raise the national strategic technology tax credit for artificial intelligence data centers (AIDCs) from 15% to 20%, matching the semiconductor rate, and to include buildings, power systems, air-conditioning and cooling equipment. Industry representatives said the existing credit is difficult for colocation and leasing businesses to use because companies must purchase, install and directly operate the GPUs themselves. They warned that weak incentives could send investment overseas rather than to Korean provinces, as about 77% of South Korea's data centers and 79% of contracted power capacity are concentrated in the Seoul metropolitan area. A forum at the National Assembly heard that global data center capacity needs could reach 156 gigawatts by 2030, about twice the total capacity built worldwide to date, making the next three to four years a critical investment window. Participants also called for accelerated dedicated electricity tariffs, nighttime-use incentives and broader cloud support. Government officials acknowledged the wider ecosystem effects of AIDCs but urged caution over overlapping tax benefits.

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