South Korean President Yoon Suk-yeol unveiled a new stimulus package for the country’s
semiconductor industry on Thursday . The package, totaling 26 trillion won (approximately €17.5 billion), comes amid a global race for semiconductors.
Towards the creation of a “mega semiconductor hub”
On May 12, Seoul launched a €6.4 billion investment in this sector. This amount was ultimately included in the €17.5 billion announced earlier. This follows a $470 billion plan already announced in January, as well as announcements from Samsung. Two years ago, the South Korean giant announced a €305 billion investment plan in its home country .
Yoon Suk-yeol explained that this program provides support for ” financing, infrastructure, research and development, as well as support for small and medium-sized enterprises .” Specifically, it includes a 1 trillion won fund for the semiconductor ” ecosystem .” This fund is intended to support small and medium-sized enterprises, as well as fabless companies .
11.5 billion euros will be allocated to a ” new financial support program .” The Korea Development Bank has been announced as being in charge of this program. The objective is to help companies of all sizes invest heavily, for example, to expand their factories.
The government also announced the extension of certain tax breaks. All these new developments point towards the construction of a ” mega semiconductor hub ” near the capital. Once completed, it is expected to be the world’s largest chip manufacturing facility. The government also claims it could create several million jobs.
South Korea wants to remain among the world leaders
Such a complex would represent a strong argument against other countries. Since the Covid-19 pandemic and the resulting chip supply problems, many nations have embarked on a veritable semiconductor race.
This translates into large subsidy programs to attract industry players, as seen in Europe and the United States. In response to Western measures, Asian giants have also retaliated with their own subsidies.
“ Semiconductors are the subject of an all-out war between countries ,” stated Yoon Suk-yeol. The objective for China, Taiwan, and South Korea is to remain competitive. The latter two currently represent the largest centers for memory chip production.
South Korea benefits in particular from the presence of Samsung, the world’s leading memory chip manufacturer, and SK Hynix . Their components are used in smartphones, computers, and connected devices worldwide. Semiconductors are the leading export of this Asian powerhouse.
For Seoul, this new plan also reflects a desire for massive investment in several technologies, such as batteries and screens. Here again, South Korea can count on its leading companies like Samsung .
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