Samsung and other chip companies get a $23 billion boost from South Korea

Semiconductors are among South Korea's top exports. They bring in tens of billions of dollars for the country so it's understandable why the government would want to insulate its many chip companies, including top dog Samsung, from the shocks resulting from US tariffs.

The South Korean government today announced a $23 billion financial package for semiconductor companies, with the primary aim of countering the uncertainties that the tariffs have fueled.

This $23 billion funding represents a 26% increase from the $18 billion package the government gave to the semiconductor industry last year. The money will be utilized to support the development of advanced chips through enhanced research and development as well as the procurement of cutting-edge manufacturing equipment.

The funds will also be utilized for improving industrial infrastructure across Yongin and Pyeongtaek. Samsung has some of its biggest chip manufacturing facilities in Pyeongtaek so it will directly benefit from these improvements.

There's concern that the South Korean semiconductor manufacturing industry is falling behind Taiwan, particularly TSMC, where the bulk of the world's advanced chips are being made. Samsung has so far been unable to increase its share in the foundry market with its 3nm process suffering largely due to quality and yield issues.

Samsung's also facing tough competition from Chinese companies in the memory segment as they're aggressively competing on price, with some companies reportedly charging half of what Samsung does for legacy memory products.

With the US pushing for advanced chip manufacturing on its shores, companies like Samsung find themselves in a tough position, where they have to balance the need for domestic superiority over complex geopolitics involving the world's economic superpower.