South Korea to Invest $19 Billion in Chip Industry

The President of South Korea announced a $19 billion support program for the chip and semiconductor industry. Yoon Suk-yeol stated on Thursday, May 25, that $7 billion will be invested in this industry early this month, emphasizing that this support program will focus on 'finance, infrastructure, research and development, as well as support for small and medium-sized enterprises.' He remarked that 'the semiconductor industry is a national battlefield,' stating that 'winning or losing depends on who first builds advanced semiconductors with high processing capabilities. The government must support this industry to avoid falling behind competitors.' South Korea is home to the world's largest memory chip manufacturers, such as Samsung Electronics and SK Hynix, and last year committed to establishing the world's largest chip production center with a $456 billion private investment in response to intense competition in this industry. The country is also constructing a 'mega chip' complex outside Seoul, which the government claims will be the largest semiconductor manufacturing facility in the world and will create millions of jobs. The President of Asia's fourth-largest economy further stated that the new financial package will be implemented through the Korea Development Bank to allow companies to make 'vital new investments.' He emphasized that Seoul will increase tax incentives for investments in this industry in hopes of boosting employment and attracting more talent. These actions come as the government seeks significant investments in six key technologies, including chips, displays, and batteries, all areas where South Korea's tech giants have become proficient. According to the Ministry of Commerce, chips are South Korea's largest exports, with exports from this sector reaching $11.7 billion last March, the highest level in nearly two years, accounting for one-fifth of South Korea's total exports. Samsung, a major player in this industry, unveiled a significant five-year investment plan two years ago aimed at transforming the country in key sectors from chips to biological applications. Ensuring the security of advanced chips internationally has become a critical issue as the United States and China engage in a fierce battle for control of the market for these products.