Industry ministry backs 2 trillion won trade finance for chip suppliers

South Korea's industry ministry said Monday it is launching a 2 trillion won ($1.49 billion) trade-finance program for semiconductor suppliers, as SK hynix and four banks pool funds to give smaller parts and equipment makers cheaper credit during a memory-chip boom.

SK hynix and KB Kookmin, Shinhan, Woori and Hana banks are contributing 133 billion won ($99.1 million), which the Korea Trade Insurance Corporation will guarantee at 20 times that amount to reach 2 trillion won, the Ministry of Trade, Industry and Energy said. It is the largest single-company agreement of its kind, the ministry said.

Suppliers recommended by SK hynix can apply for the guarantees through the four banks, receiving interest rates cut by up to 2.5 percentage points and full exemption from guarantee fees for three years. The state insurer will provide 100 percent guarantees on three-year loans and apply a special fee rate. The maximum guarantee limit for semiconductor suppliers is set 50 percent higher than for other industries, reflecting the sector's scale.

The program builds on an export supply-chain guarantee scheme launched in August 2025, which has assembled 2.4 trillion won ($1.79 billion) for automakers, shipbuilders and steel producers. With SK hynix joining, support for suppliers under the scheme rises to 4.4 trillion won ($3.28 billion).

Trade, Industry and Energy Minister Kim Jung-kwan visited SK hynix's Yongin cluster on Monday to inspect construction of its first fabrication plant and the Trinity Fab, a production-scale test line for suppliers. The government has budgeted 374 billion won ($278 million) in state funds, 57.7 billion won ($43 million) in local funds and 443 billion won ($330 million) in private money for the test fab through 2031.

"The government will expand win-win trade finance in the semiconductor sector to at least 5 trillion won ($3.72 billion)," Kim said at the signing ceremony, according to the ministry. He also said the government would support a co-growth research and development project, a new semiconductor fund and workforce training, adding that he wants the benefits of the chip industry's boom to reach smaller companies.

The ministry plans to extend the trade-finance model to defense, nuclear power and biotech, aiming to raise 10 trillion won ($7.45 billion) in total funds by the end of the year. Earlier at the site, Kim stressed the need to secure domestic chip production capacity quickly to ease a global memory shortage and urged that no safety accidents occur as construction timelines are shortened.