SK hynix (000660.KS) is teaming up with the government and the financial sector to provide 2 trillion won ($1.4 billion) in financing to suppliers of semiconductor materials, parts and equipment. The plan is to ease cash-flow strains by raising the suppliers' borrowing limits and lowering their interest burdens, while also building a facility where advanced chip technologies can be verified, strengthening the competitiveness of the domestic semiconductor supply chain.
SK hynix said on the 19th that it signed a memorandum of understanding on export supply chain guarantees with the Ministry of Trade, Industry and Energy, the Korea Trade Insurance Corporation and four major commercial banks — KB Kookmin, Shinhan, Woori and Hana Bank — at the public relations center of the Yongin semiconductor cluster in Gyeonggi Province. SK hynix President Kwak Noh-jung, Trade, Industry and Energy Minister Kim Jung-kwan and chief executives of major supplier companies attended the event.
At the center of the agreement is a financing program totaling 2 trillion won. SK hynix and the commercial banks contribute the funds, while the Korea Trade Insurance Corporation provides the guarantees. The program will expand loan limits for small and mid-sized suppliers that have difficulty raising capital and reduce their interest and guarantee fee burdens. The first guarantee certificate was handed over to a supplier covered by the program at the event.
Alongside the financing, SK hynix will also support its suppliers' technology development and commercialization. The flagship project is the Trinity Fab, now under construction at the Yongin semiconductor cluster. The government, local authorities and SK hynix are jointly investing a combined 870 billion won to build the facility inside the cluster's first chip plant, where advanced semiconductor technologies can be verified in connection with mass production.
Ahead of the signing ceremony, Kwak, Kim and other participants toured the construction site of the cluster's first fab and the Trinity Fab project site. At a meeting that followed, they heard concerns raised by the suppliers and discussed ways to cooperate on stabilizing the semiconductor supply chain and raising the level of technological self-sufficiency.
"To secure the global competitiveness of Korea's semiconductor industry, building a solid ecosystem of materials, parts and equipment is essential," Kwak said. "Based on this financing support and the technology verification environment created through the Trinity Fab, we will further solidify our technology leadership in the global semiconductor market together with our suppliers."