Ministry of Industry Provides 1.1 Trillion Won Financial Support to Fabless Companies... Also Announces Comprehensive System Semiconductor Measures

Development of Edge Semiconductors by 7 Major Industries
First On-Site Visit by Vice Minister Park Seong-taek

The government will open a system semiconductor verification support center in Pangyo, Seongnam, this September. It will strengthen the currently operating Artificial Intelligence (AI) semiconductor collaboration forum and provide financial support of 1.1 trillion KRW to semiconductor design specialized companies (fabless companies).

On the 14th, the Ministry of Trade, Industry and Energy announced that First Vice Minister Park Seong-taek visited Puriosa AI, a fabless company located in Gangnam, Seoul, and held a meeting with major domestic AI semiconductor demand and supply companies. This event was Vice Minister Park’s first field visit since his recent appointment. Industry participants included Mobilint, Gaonchips, Obigo, DeepX, LG Electronics, Hyundai Motor Company, Hanwha Systems, and the Korea Semiconductor Industry Association.

During the meeting, with 'on-device AI'?AI embedded directly into devices?spreading across all industrial sectors, the participants assessed the status of AI technology and domestic semiconductor application by industry sectors such as automotive, home appliances, and defense. They discussed plans for developing and applying industry-tailored high-performance, low-power AI semiconductors (edge semiconductors). The industry attendees shared the view that while companies like Nvidia currently lead the server semiconductor market, South Korea’s environment, combined with its key industries, is favorable for developing edge semiconductors, opening opportunities for new fabless entrants.

Accordingly, from next year, the Ministry of Trade, Industry and Energy plans to support the development of edge semiconductors centered on seven major industries (automotive/home appliances & IoT/machinery/robotics/energy/bio & medical/defense) to integrate industry and AI and create new business models.

For example, using AI semiconductors, a function can be implemented that automatically recommends nearby affordable gas stations via a pop-up when a vehicle is low on fuel. Another service could automatically detect expired food items inside a refrigerator and notify customers. AI semiconductors applied in the energy sector can assess power consumption based on seasonal or occupancy changes and recommend ways to reduce electricity usage.

The government also plans to announce a comprehensive support plan for the system semiconductor industry in the AI era in the second half of the year. This plan will include large-scale demand-linked research and development (R&D), AI semiconductor development and production infrastructure establishment, large-scale financing for fabless scale-up, and training of excellent design talent, as requested by the industry.

First, the operation of the ‘AI Semiconductor Collaboration Forum,’ which includes 11 demand companies by industry and 31 IP, fabless, design house, and software companies, will be strengthened. In September this year, a system semiconductor verification support center will open in Pangyo, Seongnam, providing design and verification support using expensive equipment essential for AI semiconductor development. Additionally, a 'Korea-US AI Semiconductor Center' will be established in Silicon Valley, USA, to support fabless companies’ overseas expansion.

The ministry plans to actively execute a semiconductor ecosystem fund worth 1.1 trillion KRW starting from the third quarter of this year, targeting fabless companies aiming for scale-up or mergers and acquisitions (M&A). Beginning with the currently raised 300 billion KRW fund, it will focus on supporting the growth of system semiconductor companies.

Training programs within universities to cultivate semiconductor design talent will be strengthened, and new education courses for design engineers who can be immediately deployed in the field will be established. Furthermore, in consultation with related ministries, conditions will be improved to enable excellent foreign talents to be employed by domestic fabless companies.

This content was produced with the assistance of AI translation services.