South Korea will set up a $7 billion aid package for the chip industry

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South Korean Finance Minister Choi Sang-mok. File | Photo credit: Reuters

South Korea will set up an aid package worth more than $7 billion to support its chip industry, the Finance Ministry said on Sunday, as part of its push to boost its critical semiconductor sector.

This initiative follows last year’s pledge to build the world’s largest chip center using $240 billion in private investment, mainly from Samsung Electronics, the world’s largest memory chip maker, as the company seeks an edge in the global industry .

The government “is preparing an aid package of more than 10 trillion won ($7.2 billion) to support fables, chip materials and production equipment in all areas of the chip industry,” Finance Minister Choi Sang-mok said, according to the released statement from the Ministry of Finance. Sunday.

The $7.2 billion package could be created through “a new fund financed by private and public financial institutions,” Choi told executives from domestic chip makers at a meeting on Friday, according to the statement, and further details are to be announced announced.

It comes at a time when Asia’s fourth-largest economy is looking to invest heavily in six key technologies, including chips, displays and batteries, all areas where the country’s tech giants are already well established.

South Korea is home to two of the world’s largest memory chip manufacturers: Samsung Electronics and SK Hynix.

Semiconductors are Seoul’s top export, reaching $11.7 billion in March, the highest level in almost two years. They represent a fifth of total South Korean exports, according to figures from the Ministry of Commerce.

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In May 2022, Samsung announced a massive investment blueprint of 450 trillion won over the next five years, aimed at making the company a leader in key sectors from semiconductors to biological products.

Securing the supply of advanced chips has become a crucial issue internationally, with the United States and China locked in a fierce battle for control of the chip market.

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