Minister of Trade, Industry and Energy Joo Hyung-hwan, SK Hynix Vice Chairman & CEO Park Sung-wook, Vice Chairman Nam Ki-man of the Korea Semiconductor Industry Associaiton, and other officials gesture during the minister’s tour to SK Hynix’s plant in Icheon, Gyeonggi-do, on Jan. 25.

Minister Joo Hyung-hwan of the Ministry of Trade, Industry and Energy (MOTIE) said the government would pour 43.9 billion won into investments in semiconductor research and development this year, a far cry from nothing in 2016. 

The move is designed to raise a semiconductor growth fund to nurture semiconductor SMEs and provide support to the development of fabless semiconductors and system semiconductors, as well as the building of  the foundry eco-system. 

MOTIE Minister Joo announced the 2017 policies while touring SK Hynix’s plant in Icheon, Gyeonggi-do, on Jan. 25. 

In return, SK Hynix Vice Chairman & CEO Park Sung-wook, also chairman of the Korea Semiconductor Industry Association (KSIA), said, “The semiconductor industry will play as a driving force behind the national economy.”

Minister Joo disclosed plans to support R&D support for the development next-generation technologies, foster a Design House to expand services of the industry and invigorate fund investments, and provide support to eliminate grievances and complaints related to promising items and markets, including NAND flash and China. 

The MOTIE plans to spend 83.7 billion won in a project to develop power semiconductors to cope with a rising demand for low-power, high-efficiency chips. The ministry plans to set aside 43.9 billion for semiconductor R&D this year. The government spent nothing in the semiconductor R&D sector last year. The government plans to expedite services of the semiconductor eco-system using Korean foundry facilities by focusing on nurturing Design House, a company specializing in services to support chip design, while nurturing semiconductor SMEs by raising semiconductor funds.

On the same day, Samsung Electronics and SK Hynix signed a contract to invest in a semiconductor growth fund with Korea Growth Investment Corp. The deal calls for a semiconductor growth fund with 200 billion won. Samsung Electronics and SK Hynix chipped in 50 billion won and 25 billion won in the mother fund, respectively. On top of their 75 billion won, the agreement has called for attracting 125 billion won in venture capital from the private sector to raise a combined 200 billion won.  

Minister Joo said, “The current status of the operation of a government-private sector task force to help the private sector invest in NAND flash memory, which is expected to see a rise in the market of the solid state drive (SSD) due to a rising demand and the upgrading of smartphones, will be inspected and new grievances and complaints will be explored in an aggressive manner.” 

He added that his ministry plans to expedite Korean fabless companies’ growth by supporting the development of system smartphones. 

The MOTIE plans to invest 3.86 billion won developing system semiconductor technologies in connection with global demand. SK Hynix Vice Chairman Park said, “Despite uncertainties in the global business environment, Korean semiconductor companies will continue to play a part as a driving force behind the national economy through investments and exports, and build the groundwork for the 4th Industrial Revolution.

MOTIE Minster Joo, wearing dust-proof clothes, looks at semiconductor lines of SK Hynix’s plant in Icheon. (Photos: MOTIE)