Economy
President of S. Korea Announces record $19 bn plan to boost chip industry
South Korean President Yoon Suk Yeol on Thursday announced a record $19-billion-dollar support plan for the country’s crucial semiconductor industry.
South Korea is home to the world’s top memory chipmakers Samsung Electronics and SK hynix and last year pledged to build the world’s largest chip centre using $456 billion of private investment as it seeks an edge in the global industry.
“We have created a comprehensive support programme for the semiconductor industry worth 26 trillion Korean won, which encompasses financial, infrastructure, research and development, as well as support for small and medium-sized companies,” he said, according to a statement from his office.
The package includes a $7 billion investment announced earlier this month.
Yoon also said Seoul would extend tax benefits for chip investments, in hopes of boosting employment and attracting more talent to the industry.
The country is also building a “mega chip cluster” just outside Seoul, which the government claims will be the world’s largest semiconductor-making complex and create millions of jobs.
“As you all know, semiconductors are a field of national all-out war,” Yoon said.
“Winning or losing depends on who makes the state-of-the-art semiconductors with high information processing capabilities first. The state must provide support for semiconductors so that they do not lag behind competitors,” he added.
With the new package, Yoon said there would be a “new semiconductor financial support programme worth 17 trillion won” run through the Korea Development Bank, to allow companies to make crucial new investments.
“As companies invest enormous amounts of money in facilities such as new factories and line expansions, liquidity problems arise,” he said.
“I believe that these difficulties will be largely resolved through the Korea Development Bank’s support programme,” he added.
– Key sector –
The plan will also create a “semiconductor ecosystem fund” worth a trillion won, which will support fabless companies and small and medium enterprises linked to the industry.
“Our fabless market share is still in the one percent range, and foundry, which manufactures system semiconductors, is unable to close the gap with leading companies such as TSMC,” Yoon said.
Earlier this month, Seoul said it would set up an aid package worth more than $7 billion to support its chip industry, as part of its drive to boost the semiconductor sector, which is critical to Asia’s fourth-largest economy.
The moves come as the government looks to invest heavily in six key technologies including chips, displays and batteries, all areas where the country’s tech giants are well-established already.
Semiconductors are South Korea’s leading export and hit $11.7 billion in March, their highest level in almost two years, accounting for a fifth of South Korea’s total exports, according to trade ministry figures.
Samsung in May 2022 unveiled a massive 450 trillion won five-year investment blueprint aimed at making the country a frontrunner in key sectors from semiconductors to biologics.
Securing supplies of advanced chips has become a crucial issue internationally, with the United States and China locked in a fierce battle for control of the market.
“South Korea is supplying 80 percent of the world’s memory semiconductors, and has said it is investing 300 trillion won in the Yongin cluster, but there has been a water supply issue with it,” Kim Dae-jong, a professor of business administration at Sejong University in Seoul, told AFP.
“On top of tackling such issues, today’s announcement seems to be an effort to support innovative small and medium-sized enterprises to further strengthen their competitiveness against (rivals) like Taiwan.”
Bangladesh has sought financial assistance from the World Bank to help meet rising energy costs amid global economic uncertainty, Finance Minister Amir Khasru Mahmud Chowdhury said on Monday.
Speaking to reporters in Bangkok on the sidelines of the 2026 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group, the minister said discussions with the World Bank were underway on possible financial support. Work was also progressing on a proposed framework agreement between the two sides, he added.
The minister expressed hope that the World Bank would continue to support Bangladesh as the country navigates mounting economic challenges.
He said global instability had increased the financial burden on Bangladesh’s energy sector, making additional support important to help manage the rising costs. According to the minister, the World Bank had responded positively to discussions on possible assistance.
Bangladesh’s engagement with the lender should go beyond existing funding arrangements and ongoing development projects, he said, stressing the need for broader cooperation to address the economic pressures arising from global uncertainty and higher energy expenditure.
Framework Agreement Under Discussion
Bangladesh and the World Bank are also working towards a framework agreement to strengthen their partnership, the minister said.
Discussions and related procedural work are continuing, with further steps dependent on progress in negotiations and agreement between the two sides.
The minister also emphasised the need to align development initiatives supported by international partners with the government’s election manifesto and national development priorities.
He said coordination between government policies and external assistance would be important in advancing Bangladesh’s economic objectives.
Bangladesh’s IMF Engagement Also in Focus
The possibility of a new lending programme with the IMF is another issue of interest for Bangladesh during the annual meetings, scheduled for October 12-18.
The meetings bring together finance ministers, central bank governors and senior officials from international financial institutions to discuss global economic developments, financing needs and development priorities.
For Bangladesh, a potential new IMF programme could provide additional external financing and support efforts to maintain macroeconomic stability. However, the size, terms and timeline of any new arrangement have not been formally confirmed.
Rising Global Costs Put Pressure on Bangladesh
Geopolitical tensions, volatile energy markets, inflation and higher borrowing costs continue to pose challenges for economies worldwide, particularly those heavily dependent on imports.
For Bangladesh, higher energy import bills can increase pressure on foreign exchange reserves and complicate government expenditure planning.
While financing from international development partners could help ease some of these pressures, sustained economic stability also depends on stronger revenue collection, improvements in the banking sector, more efficient public spending and a business environment conducive to investment.
Bangladesh’s participation in the annual meetings is therefore focused not only on securing financial assistance but also on strengthening development partnerships and exploring ways to address immediate economic pressures while pursuing longer-term development goals.
The outcome of the discussions with the World Bank, along with any progress towards a new IMF lending arrangement, will be important in determining the extent of additional external support available to Bangladesh.
Expatriate Bangladeshis sent approximately US$ 2.11 billion in remittances during the first 28 days of September in the fiscal year 2024-25, according to data released by Bangladesh Bank on 29 September.
Of this total, state-owned and specialised banks handled $679.10 million, while private banks received $1.43 billion in remittances.
Chief Adviser to Bangladesh’s interim government, Professor Muhammad Yunus, has vowed to expedite reforms and hold elections swiftly. Yunus, who recently assumed the role after the collapse of Prime Minister Sheikh Hasina’s 15-year administration, expressed his commitment during an interview with Tokyo-based news outlet NHK WORLD in New York on Sunday. He was attending the United Nations General Assembly at the time.
Following mass student-led protests that ended Hasina’s long-standing rule in August, Yunus stepped in as the leader of the caretaker government. Known for founding Grameen Bank, an institution providing microloans to the underprivileged, Yunus, along with the bank, earned the Nobel Peace Prize in 2006 for his efforts in poverty alleviation.
During the interview, Yunus emphasized that the interim government’s primary mission is to implement reforms promptly and ensure elections are held as soon as the groundwork is complete. He underscored the importance of success, stating, “Failure is not something that we can accept.”
Addressing the pivotal role of students in the ousting of the Hasina administration, Yunus acknowledged the sacrifices made by young people, referring to their involvement as part of a “revolution.” He highlighted his intention to engage the younger generation in shaping policy.
Furthermore, Yunus called for continued support from Japan, Bangladesh’s largest donor, during this crucial transition period. He stressed that Japan’s assistance is vital to stabilizing Bangladesh’s economy and fostering a democratic foundation in the nation.
