Korean $19 Billion Support Plan On Semiconductor Chips

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South Korean President Yoon Suk-yeol announced a record $19 billion support package to support South Korea's vital semiconductor industry.

South Korea is home to Samsung Electronics and SK hynix, the world's top memory chip makers. Last year, South Korea pledged $456 billion in private investment to build the world's largest chip hub to dominate the global industry.

"We have developed a comprehensive support plan worth 26 trillion won ($19.1 billion) for the semiconductor industry, which includes finance, infrastructure, R&D, and support for small and medium-sized enterprises," he reportedly said. A statement from his office.

The plan includes a $7 billion investment announced earlier this month.

Yoon also said that Seoul will expand tax incentives for chip investment, hoping to boost employment and attract more talent to the industry.

South Korea is also building a "large chip cluster" outside Seoul, which the government claims will be the world's largest semiconductor manufacturing complex and create millions of jobs.

"As we all know, semiconductors are the domain of the country's all-out war," Yin said. "Victory or defeat depends on who first manufactures state-of-the-art semiconductors with high information processing capabilities. The state must provide support for semiconductors so that they do not lag behind their competitors.

He added. Through the new package, the Korea Development Bank will roll out a new semiconductor financial support program "worth 17 trillion won" ($12.5 billion) to allow companies to make significant new investments, Yoon said.

"As companies invest heavily in facilities such as building new factories and expanding production lines, liquidity issues arise," he said. "I am confident that through the support program of the Development Bank of Korea, these difficulties will be resolved to a large extent," he added. The program will also create a "Semiconductor Ecosystem Fund" worth 1 trillion won ($734 million) to support semiconductor companies as well as small and medium-sized enterprises related to the industry.

"Our fabless market share is still in the 1% range, and foundries that make system semiconductors can't close the gap with leading companies like TSMC," Yoon said.

Earlier this month, Seoul said it would develop an aid package worth more than $7 billion to support its chip industry as part of its push to grow the semiconductor industry, which is vital to the world's fourth-largest economy. The moves come as the government wants to invest heavily in six key technologies, including chips, displays and batteries, where Chinese tech giants have gained a foothold.

Semiconductors are South Korea's top export, reaching $11.7 billion in March, the highest level in nearly two years and accounting for one-fifth of South Korea's total exports, according to South Korea's trade ministry. Samsung unveiled a massive five-year blueprint for a massive 450 trillion won ($330 billion) investment in May 2022 that aims to make South Korea a front runner in key sectors ranging from semiconductors to biologics. Securing the supply of advanced chips has become a key international issue, with the United States and China battling it out for control of the market.

Kim Dae-jong, a professor of business administration at Sejong University in Seoul, told AFP: "South Korea supplies 80% of the world's memory semiconductors and said it will invest 300 trillion won ($220 billion) in the Yongin industrial cluster, but the cluster has water supply problems." "In addition to addressing these issues, today's announcement appears to be aimed at supporting innovative SMEs to further enhance their competitiveness with competitors such as Taiwan."

Refer to the link https://www.aljazeera.com/economy/2024/5/23/south-korea-unveils-record-19bn-package-to-support-chip-industry