S Korea announces $19b support package for chip industry
Friday, 24 May 2024
SEOUL, May 23 (Reuters): South Korea announced on Thursday a 26 trillion won ($19 billion) support package for its chip businesses, citing a need to keep up in areas like chip design and contract manufacturing amid 'all-out warfare' in the global semiconductor market.
Under the package, President Yoon Suk Yeol said a financial support programme worth about 17 trillion won was planned through state-run Korea Development Bank to back investments by semiconductor companies, according to the presidential office.
"As we all know, semiconductors are a field where all-out national warfare is underway. Win or lose, that depends on who can make cutting-edge semiconductors first," Yoon said at a meeting with top government officials.
South Korea, home to the world's top memory chip makers Samsung Electronics and SK Hynix, has fallen behind some rivals in areas such as chip design and contract chip manufacturing.
South Korea's share of the global fabless sector, which is dominated by companies like US giant Nvidia that design chips but outsource manufacturing, stood at about 1 per cent, Yoon's office said. There was also a gap between local chipmakers and the leading contract chip makers like Taiwan's TSMC, it said.
Yoon said a 1 trillion won fund would be set up to support equipment makers and fabless companies.
Industry minister Ahn Duk-geun said the government aimed to help boost South Korea's global market share in non-memory chips, such as mobile processors, to 10 per cent from the current 2 per cent.
The package is bigger than plans flagged by the country's finance minister Choi Sang-mok earlier this month, when he said the government was targeting support for chip investments and research worth more than 10 trillion won.
In a press briefing, Choi described South Korea's chip support package "as good as" any other country.
Countries around the world ranging from China to the United States have been ploughing tens of billions of dollars via grants and other means to support their own chip sectors.