On Thursday, Yoon Suk Yeol, the president of South Korea, unveiled a historic $19 billion support package for the vital semiconductor industry in his nation.
The biggest memory chip companies in the world, Samsung Electronics and SK Hynix, are based in South Korea, which promised last year to use $456 billion in private investment to construct the largest chip center in the world in an effort to gain an advantage over other countries in the industry.
“We have created a comprehensive support programme for the semiconductor industry worth 26 trillion Korean won, which encompasses financial, infrastructure, research and development, as well as support for small and medium-sized companies,” he said, according to a statement from his office.
A $7 billion investment that was announced earlier this month is part of the deal.
Yoon added that Seoul would continue to offer tax breaks for chip investments in an effort to increase employment and draw in more skilled workers.
Additionally, the nation is developing a “mega chip cluster” outside of Seoul, which it says will be the largest semiconductor manufacturing complex in the world and generate millions of employment.
“As you all know, semiconductors are a field of national all-out war,” Yoon said.
“Winning or losing depends on who makes the state-of-the-art semiconductors with high information processing capabilities first. The state must provide support for semiconductors so that they do not lag behind competitors,” he added.
With the new package, Yoon said there would be a “new semiconductor financial support programme worth 17 trillion won” run through the Korea Development Bank, to allow companies to make crucial new investments.
“As companies invest enormous amounts of money in facilities such as new factories and line expansions, liquidity problems arise,” he said.
“I believe that these difficulties will be largely resolved through the Korea Development Bank’s support programme,” he added.
