South Korea announced on Thursday (May 23) a 26 trillion won ($19 billion) support package for its chip businesses, citing a need to keep up in areas like chip design and contract manufacturing amid ‘all-out warfare’ in the global semiconductor market.

Earlier in the day, South Korea’s President Yoon Suk Yeol held a meeting and said that a financial support programme worth about 17 trillion won ($12.5 billion) is planned through state-run Korea Development Bank to back investments by semiconductor companies under the package. Yoon added a 1 trillion won fund would be set up to support equipment makers and fabless companies.

South Korea, home to the world’s top memory chip makers Samsung Electronics and SK Hynix, has fallen behind some rivals in areas such as chip design and contract chip manufacturing.

South Korea’s share of the global fabless sector, which is dominated by companies like U.S. giant Nvidia that design chips but outsource manufacturing, stood at about 1%, Yoon’s office said. There was also a gap between local chipmakers and the leading contract chip makers like Taiwan’s TSMC, it said.

(Reuters)