South Korea Prepares Funds Up to IDR 112.5 Billion for Technological Totality

South Korea is preparing a support package for chip investment and research worth more than 10 trillion won, approximately USD 7 billion (IDR 112.5 billion). South Korean Finance Minister, Choi Sang-mok, mentioned that this investment is aimed at winning the competition in the semiconductor industry.

Choi Sang-mok stated that the government will soon announce the details of this investment package targeting chip materials, equipment makers, and companies throughout the semiconductor supply chain. This was quoted from Reuters on Monday (13/5/2024).

“This program may include policy loan offerings and the establishment of new funds funded by state and private financial institutions,” Choi told domestic chip equipment maker executives in a meeting.

South Korea is also constructing a mega chip cluster in Yongin, south of the capital Seoul, touted as the world’s largest high-tech complex. Earlier, South Korean President Yoon Suk Yeol promised to mobilize all available resources to win the ‘chip war’ and pledged tax benefits for investment.

Samsung Receives Funding from the US Amounting to Hundreds of Billion Rupiah

On the other hand, the United States government under Joe Biden will provide grants of up to USD 6.4 billion, approximately IDR 103.5 trillion, to Samsung. According to the US Department of Commerce, this move is aimed at expanding chip production in Texas, as part of broader efforts to enhance US chip manufacturing.

“The funding from the Chips and Science Act 2022 will support two chip production facilities, a research center, and packaging facilities in Taylor, Texas,” the agency said, as quoted from Reuters on Wednesday (17/4/2024).

This will also enable Samsung to expand its semiconductor facilities in Austin, Texas. Commerce Secretary Gina Raimondo added that this initiative could also boost chip production for aerospace, defense, and automotive industries while strengthening national security.

“This investment will enable the US to once again lead the world, not only in semiconductor design, which we currently lead, but also in manufacturing, advanced packaging, as well as research and development,” Raimondo said.

Samsung Electronics Co-CEO, Kyung Kye Hyun, stated that to meet the anticipated surge in demand from US customers, future products like AI chips will be equipped with cutting-edge process technology.

“In the process, it will also help provide security to the US semiconductor supply chain,” Kyung Kye Hyun elaborated.

Chip Production Scheduled for 2026

Samsung has revealed its estimation to commence chip production in Texas by 2026. Analysts predict that Samsung is likely to initiate the production of 4-nanometer chips on its sample production line and eventually expand to 2-nanometer chips.

The announcement, making Samsung the third-largest recipient of funding from the Chips Act, as first reported by Reuters, is the latest step by the Biden administration to build the chip manufacturing industry in the US.

The goal is to reduce dependence on China and Taiwan, as the US share of global semiconductor manufacturing capacity has declined from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association (SIA).

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Source: Straitstimes