SK hynix, gov't to provide 2 tln won in loan guarantees to semiconductor suppliers

SEOUL, Oct. 19 (Yonhap) -- South Korean chip giant SK hynix Inc. said Monday it will partner with the government and major banks to provide 2 trillion won (US$1.5 billion) in loan guarantees to local semiconductor suppliers to strengthen the domestic chip supply chain.

SK hynix and the Ministry of Trade, Industry and Resources signed an agreement to launch the program at the chipmaker's semiconductor cluster promotion center in Yongin, south of Seoul.

Under the agreement, SK hynix and four major banks will contribute a combined 100 billion won to support the program, while the state-run Korea Trade Insurance Corp. (K-SURE) will provide up to 2 trillion won in loan guarantees to semiconductor materials, parts and equipment suppliers.

Suppliers recommended by SK hynix will benefit from higher loan limits, interest rate cuts of up to 2.5 percentage points and a guarantee period extended from one to three years.

The initiative is part of the government's broader push to strengthen export supply chains by improving access to financing for smaller companies working with major manufacturers.

The government previously pledged 2.4 trillion won in loan guarantees for the automotive, shipbuilding and steel industries. The latest program extends support to semiconductors, marking the largest package involving a single sector.

Industry Minister Kim Jung-kwan said the government plans to expand financial support for the chip sector to at least over 5 trillion won, while boosting research, investment and workforce training.

The government also aims to extend the program to the defense, nuclear energy and biotech sectors, bringing total support to around 10 trillion won by year-end.

SK hynix Chief Executive Officer (CEO) Kwak Noh-jung stressed the importance of a strong semiconductor supply chain in maintaining global competitiveness and pledged closer cooperation with domestic suppliers.

ejkim@yna.co.kr
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