[Digital Today reporter Dae-geon Seok] South Korea's Ministry of Trade, Industry and Energy will add two types to its materials, parts and equipment cooperation models: an ecosystem-completion model and a region-led model. The ministry said on Feb. 2 it has begun a call for candidates for the cooperation model, including the new categories. It will use the notice to newly identify ecosystem-completion and region-led cooperation models.

The cooperation model is a flagship programme pursued after Japan's export curbs in 2019. Since its launch, it has identified and supported 74 cases of cooperation between demand and supply companies. It has accelerated technological self-reliance for items dependent on foreign suppliers, such as rare earth permanent magnets and battery pouches. It also led to the establishment of mass production plants supporting domestic demand.

The ministry expanded support beyond imitation, catch-up and single-item-focused assistance to pre-empt next-generation items and provide ecosystem-level support to respond to industrial competition between countries. A similar case is Japan's semiconductor company Rapidus, established under the leadership of the government and demand companies.

The ecosystem-completion model aims to secure competitiveness across the upstream and downstream materials, parts and equipment ecosystem for game-changer items. Under the leadership of a final demand company, all related materials, parts and equipment companies for game-changer items innovate their technologies. The demand company takes the role of designer of the ecosystem, beyond merely being a participant. The government assigns the demand company responsibility for achieving challenging goals and gives it the authority to autonomously choose and change participating R&D companies. It will also provide large-scale R&D funding of around 6 billion won a year and policy financing.

The region-led model is a type dedicated to specialised materials, parts and equipment complexes. It is divided into a single-region type and an inter-regional cooperation type. The single-region type promotes investment in building new plants and expanding plants within specialised complexes. If local governments and regional anchor companies pledge package support for materials, parts and equipment companies' facility investment plans, the central government selects them as a cooperation model. Local governments support sites and living conditions, anchor companies support purchase commitments and demonstrations, and regional innovation institutions support the use of research equipment.

The inter-regional cooperation type supports new product development and commercialisation cooperation between demand and supply companies located in different specialised complexes. It creates synergy by connecting regional ecosystems with distinct strengths. Materials, parts and equipment specialised complexes and specialised complexes for national advanced strategic industries can apply. A materials, parts and equipment specialised complex must be included.

Song Hyun-ju (송현주), the ministry's director-general for industrial supply chain policy, said, "Now is a time when global supply chains are being reshaped more transformatively than ever, and ecosystem-level cooperation beyond individual items and cooperation among a small number of companies is needed." She added, "For sustained industrial growth, we will actively support regions so they can become key players in building the materials, parts and equipment ecosystem."