South Korea makes some of the world’s best chips, yet it still leans heavily on others for the materials and machines that make them. A new government fund is meant to start closing that gap.
Seoul is setting up a 5 trillion won fund, roughly $3.5bn, aimed squarely at chip materials, components and the smaller fabless firms that design chips without building them.
Presidential chief of staff Kang Hoon-sik announced the plan as part of a broader push to build out the country’s chip clusters.
The logic behind it is about resilience rather than prestige. Samsung and SK Hynix dominate the glamorous end of the business, memory and advanced manufacturing, but the specialty chemicals, precision parts and lithography tools that feed their fabs still come largely from abroad, especially Japan and the Netherlands.
That dependence has bitten before, which is why this matters. When Japan restricted exports of key chipmaking materials in 2019, it exposed just how vulnerable Korea’s crown-jewel industry was to a supply shock it could not control, and the lesson clearly stuck.
