South Korea’s President Yoon Suk Yeol announced on Thursday a chip industry support package worth 26 trillion won ($19 billion) to support the sector amid intensifying global competition. To maintain its position in the chip industry, South Korea needs to keep up in areas like chip design and contract manufacturing in the highly competitive global semiconductor market.
Therefore, the package will include financial programs, research and development (R&D) initiatives, and infrastructure support for chip manufacturers, material suppliers and companies specializing in chip design.
A major aspect of the support package is the $12.47 billion financial support program, which aims to back investments by semiconductor companies at the state’s Korea Development Bank.
The government also plans to extend tax breaks that will expire at the end of the year to facilitate large-scale investment. In addition, a semiconductor mega cluster project is currently underway in Gyeonggi Province.
South Korea will also launch a 1 trillion-won chip industry fund to assist fabless and chip material companies. Moreover, it will build research and development infrastructure for small and medium-sized enterprises (SMEs).
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Earlier this month, South Korea’s minister of finance Choi Sang-mok also revealed over 10 trillion won ($7.30 billion) in support for chip investments and research.
In April, South Korea’s president also announced an initiative to invest 9.4 trillion won in artificial intelligence (AI) by 2027. This falls in line with the country’s aims to have a market share of 10 percent or more in the global system semiconductor market by 2030 from the current 2 percent.
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