South Korea will set up $9.9 billion support package for chip industry

SeouL – South Korea will set up an aid package worth more than 10 trillion won (S$9.9 billion) to support its chip industry, the Finance Ministry said on May 12, as part of its drive to boost its critical semiconductor sector.

This initiative follows its pledge in 2023 to build the world’s largest chip centre using US$240 billion (S$325 billion) of private investment, primarily from Samsung Electronics, the world’s largest memory chipmaker, as it seeks an edge in the global industry.

The government “is preparing an assistance package of more than 10 trillion won to support fabless, chips materials and manufacturing equipment in all areas of chips industry”, Finance Minister Choi Sang-mok said, according to the Finance Ministry statement.

The package could be created through “a new fund financed by private and public financial institutions”, Mr Choi told executives of domestic chipmakers at a meeting on May 10, according to the statement, with further details to be announced.

It comes as Asia’s fourth-largest economy aims to invest heavily in six key technologies, including chips, displays and batteries, all areas where the country’s tech giants are well established already.

South Korea is home to two of the world’s largest memory chipmakers: Samsung Electronics and SK Hynix.

Semiconductors are Seoul’s leading export and hit US$11.7 billion in March, the highest in almost two years and accounting for a fifth of total exports, according to trade ministry data.

In May 2022, Samsung announced a massive 450 trillion won investment blueprint over the next five years aimed at making it a front runner in key sectors from semiconductors to biologics.

Securing supplies of advanced chips has become a crucial issue internationally, with the United States and China locked in a fierce battle for control of the chips market. AFP