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Last Updated on 25th June 2024
South Korea’s government has announced a robust support package worth over USD 7 billion. The package, targeting semiconductor materials, equipment makers, and fabless companies throughout the semiconductor supply chain, is expected to bolster the country’s chip industry.
Finance Minister Choi Sang-mok revealed that the government would soon announce the details of the package. The program might offer policy loans and set up a new fund with funding from public and private financial institutions. This move comes as part of South Korea’s strategy to win the “war” in the semiconductor industry.
The semiconductor industry is a critical sector for South Korea, home to major global players like Samsung and SK Hynix. The new support package is expected to provide a significant boost to these companies and others in the industry, helping them to innovate and expand their semiconductor fabrication projects in South Korea.
In addition to the financial package, South Korea is also building a megachip semiconductor cluster in Yongin, south of its capital, Seoul. Touted as the world’s largest high-tech complex, this cluster will further strengthen South Korea’s position in the global semiconductor market.
President Yoon Suk Yeol has vowed to pour all possible resources into winning the “war” in chips, promising tax benefits for investments. This commitment from the highest level of government underscores the strategic importance of the semiconductor industry for South Korea’s economy and its global standing.
The support package's announcement comes as the global semiconductor industry struggles with supply chain disruptions and rising demand as a result of the COVID-19 pandemic's accelerated digital transformation.
South Korea’s move is likely to intensify competition in the global semiconductor market, particularly with other major players like the United States and China, who have also been ramping up efforts to strengthen their domestic semiconductor industries.
South Korea, a global leader in the semiconductor industry, has recently embarked on several ambitious projects to further strengthen its position in this critical sector. Some of the key projects include:
The South Korean government unveiled plans to establish a ‘semiconductor mega cluster’ in southern Seoul by 2047. This project, involving a total investment of USD 470 billion, is a collaboration with major chip companies like Samsung Electronics and SK Hynix. The envisioned cluster will span an area of 21 million square meters and is expected to have a monthly production capacity of 7.7 million wafers by 2030.
The government plans to establish exclusive zones for the fabless semiconductor industry in Pangyo, along with foundry and memory chip production facilities in Hwaseong, Yongin, Icheon, and Pyeongtaek. An industrial zone for material, part, and equipment businesses will also be built in Anseong, with research and development facilities in Giheung and Suwon.
Along with the construction of the mega cluster, the government vowed to support the ecosystem by advancing the country’s self-sufficiency in the supply chain of key materials, parts, and equipment to 50 percent by 2030. A testbed for suppliers of chip-related materials, parts, and equipment will be launched at the Yongin complex by 2027.
These projects are expected to create over 3 million job opportunities and significantly boost South Korea’s global market share for non-memory chips. With these initiatives, South Korea is poised to further solidify its standing as a global powerhouse in the semiconductor industry.
Read: South Korea Plans to Develop $470 Billion Semiconductor Cluster in Gyeonggi province
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