South Korea is preparing a major funding push to strengthen its semiconductor industry and accelerate the development of new chip manufacturing hubs.
The government plans to establish a 5 trillion won ($3.52 billion) semiconductor fund focused on promising chip materials, components, equipment suppliers and fabless companies. It will also provide another 5 trillion won in trade financing to support industry suppliers.
The measures are part of President Lee Jae Myung’s semiconductor megaproject announced in June. Under the initiative, Samsung Electronics, SK Hynix, suppliers and local governments are expected to invest more than $576 billion in new semiconductor projects across the country.
Seoul also plans a 10-year, 1 trillion won program designed to strengthen cooperation between major chipmakers and smaller suppliers in development, testing and production.
To speed construction, the government will seek parliamentary approval for a Mega Special Zone Act this year, which would streamline permits, environmental reviews and infrastructure development.
One major project is planned for Gwangju, where the government wants military air base functions relocated by mid-2028 to make way for a new semiconductor manufacturing complex. The proposed industrial site covers about 8.3 million square meters.
Infrastructure is another priority. Authorities plan to secure 650,000 metric tons of water per day for the Gwangju-South Jeolla chip cluster by 2030. Meanwhile, the flagship Yongin semiconductor cluster is expected to receive 14.7 gigawatts of electricity by 2041.
The government said semiconductor megaprojects worth more than 350 trillion won are scheduled to begin construction or expansion this year, alongside another 57 trillion won in research and development projects.
South Korea is making expanded chip production a central part of its industrial strategy as artificial intelligence drives growing global demand for semiconductors.