South Korean President Yoon Suk Yeol has announced an unprecedented $19 billion support plan for the country’s vital semiconductor industry. South Korea, home to leading memory chipmakers Samsung Electronics and SK Hynix, strives to maintain its edge in the global market. Last year, the country pledged to build the world’s largest chip center with $456 billion in private investments.
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The new support program, valued at 26 trillion Korean won, includes financial aid, infrastructure development, research and development, and support for small and medium-sized enterprises. This package includes a previously announced $7 billion investment. President Yoon emphasized the importance of semiconductors, stating, “Winning or losing depends on who makes the state-of-the-art semiconductors with high information processing capabilities first.”
The government will extend tax benefits for chip investments to attract more talent and boost employment in the semiconductor industry. The construction of a “mega chip cluster” near Seoul is underway. This facility aims to be the world’s largest semiconductor-making complex, potentially creating millions of jobs.
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The Korea Development Bank will manage a new semiconductor financial support programme worth 17 trillion won. This initiative aims to address liquidity issues that companies face when investing in new factories and line expansions. President Yoon believes this support will significantly alleviate these companies’ financial difficulties.
The plan includes creating a “semiconductor ecosystem fund” worth one trillion won, supporting fabless companies and small and medium-sized enterprises in the industry. President Yoon acknowledged the need to improve South Korea’s fabless market share, currently at just one percent, and to close the gap in foundry services with leaders like TSMC.
Key Sector Investment
Earlier this month, South Korea announced an aid package exceeding $7 billion to support its chip industry. This investment is part of a broader strategy for six key technologies: chips, displays, and batteries. Semiconductors are a critical export for South Korea, with exports reaching $11.7 billion in March, their highest level in nearly two years.
