South Korea will launch a 5 trillion won ($3.52 billion) semiconductor fund aimed at strengthening its domestic chip supply chain. The fund targets companies in chip materials, parts, equipment and fabless design, as part of a broader national push to develop new manufacturing hubs across the country.
The government will provide an additional 5 trillion won in trade finance for semiconductor sector suppliers. Presidential Chief of Staff Kang Hoon-sik announced the measures at a press briefing following a meeting chaired by President Lee Jae Myung on Monday.
The commitments build on President Lee's semiconductor megaproject initiative, first detailed in June. Under that plan, Samsung Electronics and SK Hynix, alongside their suppliers and local governments, are expected to invest more than $576 billion in new chip manufacturing facilities, including major fabrication plants in South Korea's southwest region.
Seoul also plans a 10-year, 1 trillion won program to foster collaboration between large chipmakers and smaller suppliers across semiconductor development, testing and production.
To streamline the expansion, the government will seek parliamentary approval for a Mega Special Zone Act this year. The legislation aims to expedite permits, environmental reviews and infrastructure construction for new chip complexes.
President Lee urged the Defense Ministry to relocate a military air base in Gwangju by mid-2028 to clear the way for a planned semiconductor manufacturing complex at the site. The government has designated the 8.3 million-square-meter area as a candidate national industrial complex, with military facility relocation and temporary dispersal slated for completion by the second half of 2028.
Kang said the government would ensure timely provision of power and water for all new semiconductor projects. For the Gwangju-South Jeolla region chip cluster, authorities plan to secure 650,000 metric tons of water daily by 2030, drawing on recycled wastewater and supplies from nearby dams.
The government also plans to supply 14.7 gigawatts of electricity to the Yongin semiconductor cluster by 2041. The flagship project, located south of Seoul, will draw power from cogeneration facilities, liquefied natural gas generation and electricity from other regions.
Construction or facility expansions for other megaprojects valued at more than 350 trillion won are scheduled to begin this year across the country. An additional 57 trillion won in research and development projects are also set to commence.
The Lee administration has positioned expanded semiconductor production capacity as a central element of its industrial strategy, arguing that South Korea's existing production base is insufficient to meet future demand and sustain its competitive position.
