South Korea has launched a 2 trillion won (about $1.4 billion) trade-finance program with SK Hynix and four commercial banks to support semiconductor suppliers. According to Sina Finance, the South Korean Ministry of Trade, Industry and Energy said a signing ceremony was held on the 19th at SK Hynix’s semiconductor cluster in Yongin, Gyeonggi Province, attended by Minister Kim Jung-kwan. SK Hynix, the Korea Trade Insurance Corporation, KB Kookmin Bank, Shinhan Bank, Woori Bank, and Hana Bank signed the agreement. The ministry described it as the largest agreement for a single company since the export supply-chain guarantee program began in August last year.

The Korea Trade Insurance Corporation will provide guarantees backed by joint contributions from SK Hynix and the participating banks, enabling suppliers to borrow at lower rates. Eligible applicants must be suppliers recommended by SK Hynix and pass the corporation’s guarantee review. Participating banks can reduce loan rates by up to 2.5 percentage points; guarantee coverage rises from 90% to 100%, and the guarantee period extends from one year to three years. The banks will cover all guarantee fees for the three-year period, and the guarantee cap is 50% higher than for other industries.

The South Korean government aims to expand semiconductor-related trade finance to at least 5 trillion won. Following this agreement, total trade finance across industries stands at 4.4 trillion won, comprising 2.4 trillion won for sectors including autos, shipbuilding, and steel, plus 2 trillion won for semiconductors. The government aims to raise the overall total to 10 trillion won this year and extend the program to defense, nuclear power, and biotechnology.

Kim also visited SK Hynix’s first Yongin factory and reviewed progress at TrinityFab, where materials, components, and equipment companies can test and validate products in a mass-production environment. The government is also supporting research and development, a new semiconductor fund, and talent development. Kim said the government would advance joint-growth programs, establish the fund, and develop talent so that the semiconductor industry’s benefits reach small and medium-sized businesses.