South Korea recently disclosed a substantial support package amounting to 26 trillion won to bolster its crucial semiconductor industry. President Yoon Suk Yeol outlined the key components of this package, including a financial support program of about 17 trillion won through the state-run Korea Development Bank to encourage major investments by semiconductor companies. Additionally, a dedicated 1 trillion won fund is slated to be established to provide assistance to equipment manufacturers and fabless companies involved in chip design but outsourcing their manufacturing processes.
Moreover, President Yoon emphasized the importance of innovative strategies to fortify South Korea's standing in the nonmemory chip sector. This heightened support package surpasses earlier projections outlined by Finance Minister Choi Sang-mok, highlighting the government's commitment to fostering chip investments and research valued at more than 10 trillion won. Despite the significant role of South Korea's chip industry in the country's total exports, there have been identified areas where the sector has been trailing. Notably, South Korea's market share in the fabless sector, which encompasses companies like Nvidia, remains modest at around 1%, with noticeable gaps compared to leading contract chipmakers such as Taiwan's TSMC, as confirmed by Yoon's office.
South Korea, renowned for hosting top memory chip manufacturers like Samsung Electronics and SK Hynix, is moving ahead with plans to establish a mega chip cluster in Yongin, located south of the capital Seoul. This initiative is designed as the world's largest high-tech chipmaking complex, aimed at attracting chip equipment and fabless companies to further solidify the country's semiconductor industry. In line with these efforts, President Yoon has previously expressed a commitment to providing tax credits on investments within the domestic semiconductor sector to stimulate employment growth and draw in more skilled professionals.