South Korea to launch $19 billion chip subsidy funding and loan program in July
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Author : Calycomponents
Update time : 2024-06-28 14:21:01
According to Korean media reports, South Korea will start providing assistance to chipmakers from July, launching a 26 trillion won (about $19 billion) financial support package to boost the development of this key industry.
This South Korean program is understood to include an 18 trillion won measure that will soon begin to be implemented, including preferential loans and investment capital.
Starting next month, eligible companies will be able to receive 17 trillion won in loans at the lowest market interest rate, South Korea's Finance Ministry said in a statement Wednesday. The government will also help set up two funds totaling 1.1 trillion won, the smaller of which will raise 300 billion won by 2025 and start investing in local chip-making equipment and material makers next month.
Samsung Electronics and SK Hynix technology to help South Korea become the world's largest memory chip maker. The South Korean government is currently investing $470 billion in a semiconductor "mega-cluster" outside Seoul that will become the centerpiece of the country's chip industry. This initiative has helped South Korea join the ranks of countries from the United States to China that have invested government aid in strategic areas, especially as geopolitical tensions have fragmented the global chip supply chain.
South Korea's series of aid initiatives come at a time when the U.S. is urging allies to curb China's access to semiconductor technology. The U.S. has previously wanted South Korea to limit the flow of equipment and technology for manufacturing high-end logic and memory chips to China.
In support of the overall program, the South Korean government is extending tax incentives for eligible companies for another three years, and is also considering expanding the scope of beneficiary companies to include chip material, parts and equipment makers.