[News] South Korea Reportedly Pushes for KRW 10 Trillion Investment Plan to Strengthen Semiconductor Industry Position

2024-05-13 Semiconductors editor

The South Korean government is said to be planning to introduce a comprehensive chip investment and research support plan, surpassing KRW 10 trillion (roughly USD 7.3 billion) in scale, to enhance its position in the critical semiconductor industry, as per a report from Economic Daily News.

According to a statement released by the South Korean Ministry of Planning and Finance on May 12th, Minister Choi Sang-mok stated during a meeting with local chip material, component, and equipment manufacturers that Seoul authorities are preparing a support scheme exceeding KRW 10 trillion in scale to aid all areas of the chip industry, including fabless semiconductor companies, chip materials, manufacturing equipment, etc., with details of this plan set to be announced shortly.

This plan may involve policy financing from the Korea Development Bank and the establishment of new funds through collaboration between state-owned and private financial institutions.

Given that large corporations like Samsung Electronics and SK Hynix already possess substantial resources, the South Korean government’s plan aims to support investments in small and medium-sized enterprises and in the backend process sector. This support will extend to investments in materials, components, equipment, chip design, and packaging processes to nurture the semiconductor ecosystem evenly.

Previously, South Korea announced the development of a large-scale chip cluster in the southern city of Yongin, with a total investment of USD 470 billion, looking to become the world’s largest semiconductor high-tech park.

As the United States and Japan continue to launch subsidy battles to attract semiconductor manufacturers to their respective countries, South Korea is also preparing a response plan.

The US government previously approved subsidies of up to USD 8.5 billion for US chip giant Intel and USD 6.6 billion for TSMC from CHIPs Act to alleviate future semiconductor supply constraints. The US government also announced on April 15th that it will provide up to USD 6.4 billion in subsidies to South Korean semiconductor giant Samsung Electronics for expanding advanced chip production capacity at its Texas plant.

In comparison, figures submitted by a subcommittee under Japan’s Ministry of Finance’s Fiscal System Council show that Japan will invest JPY 3.9 trillion (approximately USD 25.7 billion) over the next three years, equivalent to 0.71% of its GDP.


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(Photo credit: Samsung)

Please note that this article cites information from Economic Daily News.

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