The South Korean government is apparently proposing to invest more than 20 trillion won (about $14.63 billion) in policy funds to promote semiconductor-related sectors like materials, components, and equipment, as well as fabless (design) firms. This comprises almost 15 trillion won (about $10.97 billion) in low-interest loans, a 1 trillion won (about $731.25 million) fund, and money to build infrastructure for semiconductor clusters. This doubles the scope of the “semiconductor financial support program,” which Deputy Prime Minister Choi Sang-mok called the “10 trillion won+alpha” plan on May. 10. The government’s assistance program includes measures to improve infrastructure, such as water and electricity supply, as well as R&D support in the semiconductor cluster in Yongin, Gyeonggi-do, where Samsung Electronics and SK Hynix intend to expand semiconductor facilities next year. This assistance will come not just from policy fund loans, but also from government money and public institution funds.
According to the Ministry of Economy and Finance and other associated ministries on May. 22., the government plans to unveil these semiconductor sector assistance measures soon. The goal is to develop the sector so the local semiconductor sector can remain competitive in the face of growing semiconductor warfare headed by the US, Taiwan and Japan which are making substantial investments in the semiconductor market. To secure loan money, the government intends to invest around 1.5 trillion won (about $1.97 billion) into the state-run Korea Development Bank (KDB). Typically, when the government increases KDB’s capital, the bank may lend out around 10 times the amount of the capital infusion. The government has not yet determined whether to provide this capital injection in the form of in-kind contributions, such as public institution stocks, or through an additional supplementary budget for cash.
