South Korea Plans $8 Billion Package To Become Chip 'Powerhouse'

South Korea is going all out to bolster its critical semiconductor industry, with the Finance Ministry on Sunday announcing a support package worth over 10 trillion won ($7.28 billion) to support its chip 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 released on Sunday.

The $7.28 billion package could be created through “a new fund financed by private and public financial institutions”, Choi told executives of domestic chip makers at a meeting on 10 May according to the statement, with further details to be announced.

This initiative 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.

Semiconductors are Seoul’s leading export and hit US$11.7 billion (S$15.9 billion) in March, their highest level in almost two years, accounting for a fifth of South Korea’s total exports, according to figures released by the trade ministry.

The country hosts two of the world’s largest memory chipmakers: Samsung Electronics and SK Hynix.

The South Korean Government plans to make a quantum leap towards developing a state-of-the-art semiconductor cluster through private investment worth KRW 340 trillion by 2026 , primarily from Samsung Electronics, the world’s largest memory chipmaker, as it seeks an edge in the global industry.

The race to secure supplies of advanced chips has become a pivotal international issue, particularly with the United States and China engaged in a fierce battle for dominance in the chip market.