South Korea revealed on Thursday a staggering 26 trillion won ($19 billion) support package for its semiconductor businesses, citing the need to keep pace in areas like chip design and contract manufacturing amidst what it termed 'all-out warfare' in the global semiconductor market.

As part of the package, president Yoon Suk Yeol announced plans for a financial support programme worth approximately 17 trillion won through the state-run Korea Development Bank to back investments by semiconductor companies, according to the presidential office.

"As we all know, semiconductors are a field where all-out national warfare is underway. Whether we win or lose depends on who can manufacture cutting-edge semiconductors first," Yoon said during at a meeting with top government officials.

South Korea, home to the world's leading memory chip makers Samsung Electronics and SK Hynix, has fallen behind some rivals in areas such as chip design and contract chip manufacturing. The country's share of the global fabless sector, dominated by companies like the US giant Nvidia that design chips but outsource manufacturing, stood at about 1 per cent, Yoon's office said. There was also a gap between local chipmakers and the leading contract chip makers like Taiwan's TSMC.

Yoon said a 1 trillion won fund would be established to support equipment makers and fabless companies. Industry Minister Ahn Duk-geun stated the government aimed to help boost South Korea's global market share in non-memory chips, such as mobile processors, to 10 per cent from the current 2 per cent.

Finance Minister Choi Sang-mok described South Korea's chip support package "as good as" any other country's, as nations worldwide have been pouring tens of billions into supporting their own chip sectors.

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