South Korea plans to spend up to 1.7 trillion won (US$1.45 billion) in the next five years to help the country's chipmakers find a way into the fast-growing non-memory chip market, the government said Thursday.
The move comes as the country's chipmakers, such as world leader Samsung Electronics Co. and Hynix Semiconductor Inc., which together control over 50 percent of the global memory chip market, have only about 3 percent of the bigger and more lucrative market for non-memory chips.
Under the plans, the country's share of the global market for non-memory chips will rise to 7.5 percent by 2015, according to the Ministry of Knowledge Economy.
The global market for non-memory chips came to $185.8 billion in 2009 and is expected to continue growing at an average of 15 percent a year, it said.
"We are No. 1 in the world in terms of memory chips, but we are really looking poor in the non-memory chip market, which is about four times the size of the memory chip market," Jung Man-
ki, head of the ministry's information and communication standards division, said at a press conference.
According to the plans, the government and private companies will jointly invest some 1.7 trillion won in the development of technologies until 2015, by when they expect to have localized
about 50 percent of core technologies for non-memory chips and about 35 percent of technologies related to building manufacturing
equipment.
The development or localization of manufacturing equipment is also a key objective of the five-year plan as the country currently
has to import 62 percent of related equipment from leading countries, such as Japan and the United States.
To this end, private companies will invest some 5 trillion won by 2015 to develop or build new semiconductor fabrication plants or foundries, the ministry official said.
The government and private companies will also provide up to 50 billion won for the next five years to 10 new fabless companies, businesses that specialize in the design and sale of
semiconductor chips while outsourcing the fabrication, or "fab," of the devices to foundries.
The government will also relocate its key semiconductor labs and fabrication institutes to Pangyo Techno Valley, located just south of Seoul, to ensure quick, 24-hour access of fabless
companies to foundries, according to the economy ministry.