South Korea Set To Provide Chip Industry Support Package Valued Over $7 Billion

South Korea is preparing a chip investment and research support package exceeding 10 trillion won ($7.30 billion).

According to Finance Minister Choi Sang-mok, the country aims to secure a leading position in the semiconductor industry. The government is expected to announce the specifics of the package, which aims to support chip materials, equipment manufacturers, and fabless companies across the semiconductor supply chain, reported Reuters.

Choi informed executives of domestic chip equipment manufacturers at a meeting that the program might encompass policy loans and the establishment of a new fund, funded by both state and private financial institutions, according to a statement from the finance ministry.

The decision coincides with the US government's push for allies, including South Korea, to intensify restrictions on China's access to semiconductor technology. American officials have also urged South Korea to limit the transfer of equipment and technologies used in manufacturing high-end logic and memory chips to China, as per Bloomberg News.

South Korea is constructing a mega chip cluster in Yongin, situated south of its capital, Seoul, which is being touted as the world's largest high-tech complex of its kind. President Yoon Suk Yeol has pledged to allocate all available resources to secure victory in the "chip war," offering tax benefits for investments as part of this commitment.

As the competition between the US and China complicates supply chains, South Korea, the world's largest memory chip producer, is aiming for dominance by investing $470 billion in a semiconductor "mega cluster" outside Seoul. To bolster this initiative, the government has proposed measures such as tax incentives for investments.