South Korea to consider setting up $3.1 billion foundry to grow local chip sector

South Korea is considering building a 4.5 trillion won ($3.06 billion) foundry to manufacture chips, funded by state and private investment, the industry ministry said, amid efforts to ensure the country remains a powerhouse in semiconductors.

President Lee Jae Myung presided over a meeting on Wednesday attended by executives from chipmakers, including Samsung Electronics and SK Hynix, as well as policymakers and experts to lay out plans to maintain the country's lead in memory chips, strengthen the foundry business and expand fabless chip design in the AI era.

"South Korea needs to take a new leap forward, and... the semiconductor sector is an area where we are very competitive," Lee said.


South Korea will consider setting up a 12-inch, 40-nanometre foundry jointly backed by the public and private sectors to help fabless firms develop and test chips, the industry ministry said in a statement.

South Korea will also seek to locally produce defence-related semiconductors, given that the sector relies on imports for 99% of its supplies, the ministry said.

The government will consider putting in a provision for the priority purchase of domestic semiconductors in national security infrastructure in a related law, it said.

A special committee on semiconductors will be established under President Lee to act as the control centre for national policies on chips, the statement said.