South Korea Unveils 19 Billion Support Package for Chip Industry
South Korea announces US$19 billion support package for chip industry. Financial support program of 17 trillion won planned through Korea Development Bank. Aim to boost global market share in non-memory chips to 10%.
The country's President, Yoon Suk Yeol, emphasised the need to excel in chip design and contract manufacturing amidst what he called "all-out warfare" in the industry.
The support package includes a financial assistance program worth approximately 17 trillion won, which will be provided through the state-run Korea Development Bank to support investments by semiconductor companies. President Yoon stated, "Semiconductors are a field where all-out national warfare is underway. Win or lose, it depends on who can make cutting-edge semiconductors first."
Despite being home to leading memory chip manufacturers like Samsung Electronics and SK Hynix, South Korea has fallen behind in chip design and contract manufacturing compared to some of its competitors. The country's share of the global fabless sector, which is dominated by companies like Nvidia, stands at only 1%. There is also a gap between local chipmakers and leading contract chip manufacturers like Taiwan's TSMC.
As part of the support package, a 1 trillion won fund will be established to assist equipment makers and fabless companies. The government aims to boost South Korea's global market share in non-memory chips, such as mobile processors, from the current 2% to 10%.
Industry Minister Ahn Duk-geun highlighted the government's goal of streamlining bureaucracy and reducing red tape to accelerate the construction of a mega chip cluster in Yongin, south of Seoul. This cluster is touted as the world's largest high-tech chipmaking complex and aims to attract chip equipment and fabless companies.
The US$19 billion support package exceeds the initial plans announced by Finance Minister Choi Sang-mok earlier this month. Choi had stated that the government was targeting support for chip investments and research worth over 10 trillion won. He described South Korea's chip support package as being on par with any other country's efforts.
Countries worldwide, including China and the United States, have been investing billions of dollars to support their own chip sectors. South Korea's move to provide subsidies for its chip companies aligns with this global trend.
President Yoon has made it clear that he is committed to allocating all possible resources to bolster the country's chip industry. In January, he announced the extension of tax credits on investments in the domestic semiconductor industry to stimulate employment and attract more talent.
South Korea announces US$19 billion support package for chip industry
Financial support program of 17 trillion won planned through Korea Development Bank
Aim to boost global market share in non-memory chips to 10%
Source: REUTERS