On Thursday, South Korea revealed a 26 trillion won ($19 billion) support package for its crucial semiconductor industry, according to the presidential office. President Yoon Suk Yeol announced that the government plans to provide approximately 17 trillion won in financial support through the state-run Korea Development Bank to facilitate large-scale investments by semiconductor companies.
Additionally, Yoon outlined the creation of a 1 trillion won fund to assist equipment manufacturers and fabless companies, which design chips but outsource production. He also instructed the industry ministry to develop innovative strategies to enhance South Korea’s competitiveness in the non-memory chip sector.
This updated support package exceeds the plans previously indicated by Finance Minister Choi Sang-mok earlier this month, who mentioned the government’s goal of providing over 10 trillion won in support for chip investments and research.
In April, South Korea’s chip industry represented 18% of the country’s total exports, despite lagging in certain areas. The market share of South Korean fabless companies, which include firms like U.S.-based Nvidia, stood at about 1%. There remains a significant gap between South Korean chipmakers and leading contract chipmakers such as Taiwan’s TSMC, according to Yoon’s office.
Home to top memory chip manufacturers like Samsung Electronics and SK Hynix, South Korea is developing a mega chip cluster in Yongin, south of Seoul. This cluster, promoted as the world’s largest high-tech chipmaking complex, aims to attract chip equipment and fabless companies.
In January, President Yoon, who has committed to deploying all available resources to win the “war” over chips, announced plans to extend tax credits on investments in the domestic semiconductor industry to boost employment and attract talent.
