South Korea’s government is preparing for a KRW10 trillion ($7.3 billion) programme to support local makers of chips and related components and materials, with various financial options being reviewed.

Finance Minister Choi Sang-mok visited makers of chip materials, parts and equipment on Friday (10 May), which pressed for improved financing and tax support to facilitate investment and R&D in the industry.

In a statement, he explained the government is considering turning to state-owned Korea Development Bank or creating a joint public-private fund for financing for the chip support project.

Choi, who also is Deputy Prime Minister, committed to working with the government to extend a sunset clause covering investment tax credit for strategic technologies due to end in 2024, while expanding the scope of R&D investment tax credits.

Ongoing large-scale projects related to advanced packaging and mini-fabs will soon undergo feasibility studies, he added.

In January, local media reported Samsung and SK Hynix planned to invest KRW622 trillion to expand chip production capacity in a 21-million-square-metre mega cluster, with 16 new fabrication facilities targeted by 2047.

The country has faced growing pressure to limit exports of advanced chips and machinery to the mainland, with its government pushing the US to reconsider new restrictions to allow local companies to move ahead with plans to expand operations in China. The US granted waivers to Samsung and SK Hynix late last year.