South Korea unveils $3.5 billion semiconductor fund to boost chip supply chain
South Korea will create a 5 trillion won fund for chip materials, parts and fabless companies, plus trade finance and infrastructure support.
South Korea announced plans on Monday to establish a 5 trillion won ($3.52 billion) fund dedicated to supporting promising semiconductor materials, components and fabless companies. The move is part of a broader government strategy to strengthen domestic chip clusters and reduce reliance on foreign supply chains.
Presidential Chief of Staff Kang Hoon-sik said the government will also provide an additional 5 trillion won in trade finance for export-oriented suppliers. In parallel, the administration aims to pass a Mega Special Zone Act this year to speed up permits, environmental reviews and infrastructure development for semiconductor projects.
To support long-term growth, the government plans to secure 650,000 tonnes of water supply by 2030 for chip projects in the Honam region. The Yongin semiconductor cluster will receive a planned 14.7 gigawatts of power by 2041, according to Kang.
The fund and related measures underscore South Korea's push to solidify its position in the global semiconductor industry, which is facing rising demand and supply chain challenges.