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(Reuters) – South Korea announced on Thursday a 26 trillion won (USD $19 billion) support package for the South Korean chip industry, citing a need to keep up in areas like chip design and contract manufacturing amid “all-out warfare” in the global semiconductor market.

Under the package, President Yoon Suk Yeol said a financial support programme worth about 17 trillion won was planned through state-run Korea Development Bank to back investments by semiconductor companies, according to the presidential office.

“As we all know, semiconductors are a field where all-out national warfare is underway. Win or lose, that depends on who can make cutting-edge semiconductors first,” Yoon said at a meeting with top government officials.

Jumpstarting the South Korean Chip Industry

South Korea, home to the world’s top memory chip makers Samsung Electronics and SK hynix, has fallen behind some rivals in areas such as chip design and contract chip manufacturing as the South Korean chip industry seem to have floundered in the past years.

South Korea’s share of the global fabless sector, which is dominated by companies like U.S. giant NVIDIA, which design chips but outsource manufacturing, stood at about 1%, Yoon’s office said. There was also a gap between local chipmakers and the leading contract chip makers like Taiwan’s TSMC, it said.

Yoon said a 1 trillion won fund would be set up to support equipment makers and fabless companies to elevate the South Korean chip industry.

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