South Korea has said it plans to expand investment and tax incentives for the semiconductor segment in line with efforts to foster the non-memory chip industry and cope with the global supply shortages of automotive chips.

“To cope with the supply shortages in the automotive chips, we plan to focus on expanding support for the 8-inch wafer foundry industry,” new Industry Minister Moon Sung-wook said during his visit to Silicon Mitus, a local fabless company.

The foundry business refers to making chips for other companies that do not have a semiconductor plant.

The global car industry has been grappling with shortages in the supply of automotive ships, with some companies being forced to suspend their production lines, reports Yonhap news agency.

South Korea, home to Samsung Electronics and SK Hynix, is a powerhouse of memory chips, which account for around 20 percent of the country’s outbound shipments. But the Korean firms have relatively lagged in developing non-memory chips.

On the previous day, Finance Minister Hong Nam-ki also said the government is studying ways to increase tax benefits and policy support for the semiconductor industry to help local chipmakers sharpen their competitive edges.

The country plans to unveil a blueprint to create what it calls a “K-semiconductor belt” within the first half of 2021.

Sign up for Newsletters

Subscribe to our newsletter and never miss an update on the latest tech, gaming, startup, how to guide, deals and more.

Showcase your brand this holiday season

Place your brand on TechGenyz with sponsored content, display ad, newsletter, product review, and more that will give more trust to your prospects, boost website traffic and increase conversions. Avail discount up to 55%. Join thousands of businesses and start growing your business.

Claim the Offer