South Korea’s government announced on Monday, August 10th, the launch of a semiconductor fund totaling 5 trillion Korean won, approximately 35.2 billion US dollars. This fund will focus on supporting chip materials, components, equipment enterprises with development potential, as well as fabless semiconductor companies, to accelerate the construction of South Korea’s semiconductor industry base.
According to Reuters, Kang Hoon-sik, the Chief of Staff of the South Korean President’s office, stated after a meeting chaired by President Lee Jae Myung that the government will also provide an additional 5 trillion Korean won in trade financing to assist semiconductor suppliers in expanding their businesses.
These measures are part of the “Semiconductor Mega Project” plan announced by the Lee Jae Myung government in June this year. Under this plan, companies like Samsung Electronics, SK Hynix, etc., will collaborate with suppliers and local governments to invest over 576 billion US dollars in new chip manufacturing projects, including the construction of large manufacturing plants in the southwest region of South Korea.
Kang Hoon-sik mentioned that the government will also launch a 10-year support plan totaling 1 trillion Korean won to enhance cooperation between large enterprises and small to medium-sized suppliers in semiconductor research and development, testing, and production processes.
Additionally, the South Korean government plans to expedite the approval process, environmental assessments, and infrastructure development of semiconductor industry projects by pushing for the passage of the “Super Zone Act” in the parliament within this year.
During Monday’s meeting, Lee Jae Myung urged the Ministry of National Defense to strive to complete the renovation of a military base in Gwangju by mid-2028 to accelerate the construction of a local semiconductor manufacturing industrial park.
The government of South Korea stated that other regions in the country are expected to commence construction or expansion of semiconductor mega projects totaling over 35 trillion Korean won this year. Approximately 57 trillion Korean won worth of semiconductor research and development projects are also set to be launched gradually.
The Lee Jae Myung government considers expanding semiconductor production capacity as a core national industrial strategy. With the rapid development of the artificial intelligence (AI) industry, existing semiconductor production bases like Icheon and Pyeongtaek may struggle to meet future demands. Hence, there is a need to expedite the construction of new large-scale semiconductor industry clusters.