South Korea will set up an aid package worth more than $7 billion to support its chip industry, the finance ministry said Sunday, as part of its drive to boost its critical semiconductor sector.

This initiative follows its pledge last year to build the world's largest chip centre using $240 billion of private investment, primarily from Samsung Electronics, the world's largest memory chip maker, as it seeks an edge in the global industry.

The government "is preparing an assistance package of more than 10 trillion won ($7.2 billion) to support fabless, chips materials and manufacturing equipment in all areas of chips industry", Finance Minister Choi Sang-mok said, according to the finance ministry statement released Sunday.

The $7.2-billion package could be created through "a new fund financed by private and public financial institutions", Choi told executives of domestic chip makers at a meeting on Friday according to the statement, with further details to be announced.

It comes as Asia's fourth-largest economy aims to invest heavily in six key technologies, including chips, displays and batteries, all areas where the country's tech giants are well-established already.

South Korea is home to two of the world's largest memory chip makers: Samsung Electronics and SK Hynix.

Semiconductors are Seoul's leading export and hit $11.7 billion in March, their highest level in almost two years, accounting for a fifth of South Korea's total exports, according to figures released by the trade ministry.

In May 2022, Samsung announced a massive 450 trillion won investment blueprint over the next five years aimed at making it a frontrunner in key sectors from semiconductors to biologics.

Securing supplies of advanced chips has become a crucial issue internationally, with the United States and China locked in a fierce battle for control of the chips market.