South Korea to launch $3.5 billion chip fund, speed development of semiconductor hubs

South Korea will launch a 5 trillion won ($3.52 billion) semiconductor fund and provide an additional 5 trillion won in trade finance for suppliers, Presidential Chief of Staff Kang Hoon-sik said Monday after a meeting chaired by President Lee Jae Myung. The measures are part of Lee's semiconductor megaproject initiative unveiled in June, under which Samsung Electronics and SK Hynix, together with suppliers and local governments, are expected to invest more than $576 billion in new chip manufacturing projects, including major fabrication facilities in the country's southwest region. Kang said the government would also launch a 10-year, 1 trillion won programme to support cooperation between large companies and smaller suppliers across semiconductor development, testing and production. The government will also seek passage of a Mega Special Zone Act at parliament within the year to speed up permits, environmental reviews and infrastructure construction. Lee urged the Defence Ministry to relocate functions of a military air base in Gwangju by mid-2028 to accelerate development of a semiconductor manufacturing complex planned for the site. Kang said the government would ensure power and water supplies are available on schedule for new semiconductor projects.