To boost the chip industry, South Korea will launch a support program worth more than $7 billion.
South Korea's Deputy Prime Minister and Finance Minister Choi Sang-mok said on Sunday that South Korea is preparing a series of support programs for chip investment and research with more than 10 trillion won ($7.3 billion).
Choi said the support program targets chip materials, equipment manufacturers and fabless companies throughout the semiconductor supply chain, and the government will soon announce the details of the support program.
Choi told executives at a meeting of local chip materials, components and equipment makers in South Korea at a meeting on Friday that the government is considering funding to support the industry, and that the plan could include policy loans and the creation of a new fund funded by state and private financial institutions.
It is important to note that the government will use indirect support rather than direct financial input. According to Choi Sang-mu, direct financial investment is limited, and at this stage, various ways are being discussed, such as policy-based financing through industrial banks, or the establishment of funds jointly funded by financial, non-governmental, and policy-based financing.
In addition, South Korea's Ministry of Finance also said that it will consult with the National Assembly to extend the tax credit for national strategic technology investment, which was originally scheduled to end at the end of this year, and will also consider further expanding the scope of the tax credit for national strategic technology R&D and investment.
(Source: Pixabay)
As Asia's fourth-largest economy, South Korea is home to two of the world's largest memory chip makers, Samsung Electronics and SK hynix.
Semiconductors are South Korea's main export, reaching $11.7 billion in March, the highest level in nearly two years and accounting for about one-fifth of South Korea's total exports, according to statistics released by South Korea's Ministry of Trade, Industry and Energy.
Reuters reported that South Korea has set its sights on the semiconductor industry "war". Previously, South Korean President Yoon Suk-yeol had said that he would invest all possible resources to win the competition in the semiconductor industry, and promised to provide tax incentives for investment.
According to the analysis of South Korean media, in the context of the pursuit of localization of the semiconductor industry and the intensification of competition for dominance in various countries, the stable growth of the Korean economy in the future also depends on the development of the semiconductor industry.
Focusing on the development of the semiconductor industry, South Korea has made frequent moves in recent years. At the corporate level, Samsung, for example, announced an investment blueprint of 450 trillion won over the next five years as early as May 2022, aiming to position itself as a leader in key areas ranging from semiconductors to biologics; The South Korean government has provided 3.6 trillion won in policy financing for the semiconductor industry since the beginning of this year.
In June last year, South Korea's Ministry of Trade, Industry and Energy announced the creation of a new 300 billion won fund for the chip industry. It is understood that the fund's funds come from many sources, among them, South Korea's two largest chip manufacturers Samsung Electronics and SK hynix pledged to invest 75 billion won, at the same time, the Korea Development Bank, Korea Development Bank, etc. will also provide 75 billion won of policy financing for the fund, while the remaining 150 billion won comes from private investment.
It is also reported that South Korea plans to build a "giant semiconductor cluster" south of Seoul by 2047. Currently, there are 21 manufacturing plants in the region, and the cluster is planned to total 21 million square meters and reach 7.7 million wafer per month by 2030.
South Korea calls it the world's largest semiconductor high-tech complex, focusing on high-precision technologies and products, and at present, two South Korean memory chip manufacturers, Samsung Electronics and SK hynix, have decided to invest a total of 622 trillion won.
In addition to this, South Korea plans to invest heavily in six key technologies such as chips, displays, and batteries, all of which are areas that South Korean tech giants have already established.
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In fact, ensuring the supply of advanced chips has become a "battleground" in the international game.
As China rapidly develops in key technology fields such as semiconductors, AI, and 5G, the United States fears losing its long-term "dominance" in the global technology field, and just last week, the Biden administration revoked export licenses that allowed American chipmakers Intel and Qualcomm to supply semiconductor chips to Huawei, followed by a bill to impose export controls on advanced AI models developed in the United States.
According to Bloomberg, South Korea's move comes at a time when the United States is pressuring it to restrict the flow of equipment and technology for high-end logic and memory chips to China, while the United States is urging South Korea and others to further tighten restrictions on China's access to semiconductor technology.
Resources:
1.https://www.reuters.com/technology/south-korea-prepares-support-package-worth-over-7-bln-chip-industry-2024-05-12/
2.https://www.bloomberg.com/news/articles/2024-05-12/south-korea-plans-7-3-billion-program-to-support-chip-industry
3.https://www.cnbc.com/2024/05/12/south-korea-prepares-support-package-worth-over-7-bln-for-chip-industry.html
4.https://www.thehindu.com/news/international/s-korea-to-set-up-7-billion-aid-package-for-chip-industry/article68168708.ece