South Korean President Yoon Suk Yeol announced Thursday a new support plan of some 17.5 billion euros to strengthen the country’s semiconductor industry, a strategic sector at the heart of a global battle. South Korea, home to Samsung Electronics and SK Hynix, among the largest memory chip makers, announced last year the construction of the world’s largest semiconductor manufacturing center with a private investment of 240 billion dollars, seeking to gain a head start over global competitors in this key sector.

“We have created a comprehensive support package for the semiconductor industry worth 26 trillion won (around 17.5 billion euros) which includes financing, infrastructure, research and development , as well as support for small and medium-sized businesses,” the South Korean president said, according to a statement. The amount announced includes 6.4 billion euros of investments already announced on May 12.

Seoul will also expand tax benefits for chip investments, Yoon Suk Yeol said. The country is building a “mega semiconductor hub” outside Seoul, which the government says will be the world’s largest semiconductor manufacturing complex and will create millions of jobs. “As you all know, semiconductors are the subject of an all-out war between countries,” Yoon Suk Yeol said. “Victory or defeat will go to whoever first manufactures cutting-edge semiconductors with high data processing capacity.” “The state must support (the) semiconductor sector so that they do not lag behind their competitors,” he added.

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The announced support package notably includes a “new financial support program for semiconductors worth 17,000 billion won” (11.5 billion euros), managed by the Korean Development Bank, in order to enable companies to make crucial new investments, such as an expansion of their factories or production lines. Semiconductors are South Korea’s main export item and reached $11.7 billion (€10.8 billion) in March, their highest level in almost two years, i.e. a fifth of South Korea’s total exports, according to Commerce Ministry figures.