South Korea recently announced a significant support package amounting to 26 trillion won ($19 billion) for its crucial semiconductor industry, as confirmed by the country’s presidential office.
President Yoon Suk Yeol disclosed that the support initiative includes a financial assistance program for chips valued at approximately 17 trillion won through the state-owned Korea Development Bank, aimed at backing substantial investments by semiconductor companies.
Within the package, a 1 trillion won fund will be established to provide support to equipment manufacturers and fabless companies, which are responsible for chip design but outsource their manufacturing processes.
President Yoon also urged the industry ministry to devise innovative strategies to enhance South Korea’s competitiveness in the non-memory chip sector.
This newly updated support package surpasses the initial plans outlined by Finance Minister Choi Sang-mok earlier in the month, where the government emphasized aiding chip investments and research exceeding 10 trillion won.
Meanwhile, in April, South Korea’s chip industry represented 18% of the country’s total exports but faced challenges in certain areas.
The fabless sector in South Korea, including companies like U.S.-based Nvidia, holds a market share of about 1%, with a noticeable gap between South Korean chip manufacturers and leading contract chipmakers such as Taiwan’s TSMC, as highlighted by President Yoon’s office.
South Korea is in the process of establishing a massive chip cluster in Yongin, situated south of Seoul, which is envisioned as the world’s largest high-tech chipmaking complex to attract chip equipment and fabless companies.
Following President Yoon’s expressed determination to allocate extensive resources to excel in the “war” in the chip industry, he announced plans to extend tax credits on investments in the domestic semiconductor sector to stimulate job creation and draw more skilled professionals.
