The Yongin Semiconductor Industrial Complex under construction (Image courtesy of Yonhap)
SEOUL, Aug. 15 (Korea Bizwire) – The South Korean government is set to deploy a substantial semiconductor ecosystem fund starting in the third quarter of this year, targeting fabless chip design companies for scale-ups and mergers and acquisitions (M&A).
This move is part of a broader strategy to expand the country’s semiconductor value chain beyond memory chips into system semiconductors and materials, parts, and equipment sectors.
Park Sung-taek, First Vice Minister of Trade, Industry and Energy, announced the initiative during a meeting with AI chip supply companies, including Furiosa AI, on August 14.
The gathering also included representatives from major conglomerates such as Hyundai Motor, LG Electronics, and Hanwha Systems, which are actively incorporating AI into their core industries.
The fund, initially designed in July of last year, comprises 300 billion won from semiconductor companies, policy financing, and private investments. The government plans to increase this to 1.1 trillion won by 2025, with actual equity investments beginning this third quarter.
“We must redesign all industries from an AI perspective,” Park stated. “As the core of AI lies in customized, high-performance, and low-power system semiconductors, the government will spare no effort in providing all necessary support for semiconductor companies to succeed.”
Beyond financial support, the government is bolstering the industry through several key initiatives.
An AI Semiconductor Collaboration Forum has been established, involving 11 industry-specific demand companies and 31 IP, fabless, design house, and software firms.
This forum aims to develop “edge semiconductors” with high market impact, supporting everything from development to field demonstration and actual application.
A System Semiconductor Verification Support Center will open next month in Pangyo, Gyeonggi Province, providing access to expensive equipment essential for AI chip design and verification.
Additionally, a Korea-U.S. AI Semiconductor Center in Silicon Valley will support Korean fabless companies’ overseas expansion.
The government also plans to strengthen semiconductor design programs in universities and establish new training courses for design engineers ready for immediate field deployment.
These initiatives form part of a comprehensive support plan for the system semiconductor industry in the AI era, set to be announced later this year.
Kevin Lee (kevinlee@koreabizwire.com)
