Seoul, August 15, 2023 – The South Korean government is set to launch a substantial semiconductor ecosystem fund in the third quarter of this year, focusing on supporting the growth of fabless chip design companies through scale-ups and mergers and acquisitions (M&A). This initiative is a key component of the government’s strategy to expand the country’s semiconductor value chain beyond memory chips, encompassing system semiconductors and materials, parts, and equipment sectors.
First Vice Minister of Trade, Industry and Energy, Park Sung-taek, announced the initiative during a meeting with AI chip supply companies, including Furiosa AI, on August 14. Representatives from major conglomerates like Hyundai Motor, LG Electronics, and Hanwha Systems, who are actively integrating AI into their core industries, also participated in the meeting.
The fund, initially established in July 2022, comprises 300 billion won from semiconductor companies, policy financing, and private investments. The government aims to increase this to 1.1 trillion won by 2025, with actual equity investments commencing in the third quarter of this year.
“We must redesign all industries from an AI perspective,” stated Park. “As the core of AI lies in customized, high-performance, and low-power system semiconductors, the government will provide all necessary support for semiconductor companies to succeed.”
Beyond financial support, the government is implementing several initiatives to bolster the industry:
These initiatives are part of a comprehensive support plan for the system semiconductor industry in the AI era, set to be announced later this year. The government’s commitment to this ambitious plan signifies its determination to solidify South Korea’s position as a global leader in the rapidly evolving AI semiconductor landscape.
