South Korea is preparing a program to provide more than 10 trillion won ($7.3 billion) to strengthen the country’s pivotal semiconductor industry, according to Finance Minister Choi Sang-mok.
During a meeting on Friday with local manufacturers of chip materials, parts, and equipment, Choi stated that the government is considering ways to fund the program to support the industry. The finance ministry, in a statement on Sunday, said that among the options being explored are policy financing from state-owned Korea Development Bank or a joint fund from public, private, and policy financing sources. Choi, who is also the nation’s deputy prime minister, mentioned that details of the program will be announced soon.
This move comes as the US government is pressing allies, including South Korea, to further tighten restrictions on China’s access to semiconductor technology. American officials also want South Korea to restrict the flow of equipment and technologies for making high-end logic and memory chips to China, according to reports from Bloomberg News.
South Korea, the world’s largest memory chip producer, is striving for dominance by investing $470 billion in a semiconductor “mega cluster” outside of Seoul, as the US-China rivalry complicates supply chains. To support this plan, the government has proposed measures including tax incentives for investments.
The proposed 10 trillion won program highlights South Korea’s commitment to bolstering its semiconductor industry, which plays a crucial role in the global technology supply chain. By providing significant financial support, the government aims to strengthen the country’s position in the highly competitive and strategically important semiconductor market.
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