The firm told the BBC that this would be put towards building five chip factories.

Under the cunning plan, companies in high-tech industries will be offered incentives like expanded tax breaks and infrastructure support.

South Korea's Ministry of Trade, Industry and Energy said: "The mega cluster will be the key base of our semiconductor ecosystem. It planned to secure private-sector investment and "leap forward as a leading country in the middle of fierce global competition over advanced industries". Semiconductors are central to a bitter dispute between the US and China.

In October, Washington announced that it would require licences for companies exporting chips to China using US tools or software, no matter where they are made worldwide.

Last week, the Netherlands planned to restrict its "most advanced" microchip technology exports to protect national security.

South Korea's trade ministry is concerned about US tech policy which appears to give much power to US tech companies.

China has dubbed the US a "tech hegemony" to lock other countries out of the chip market. If South Korea's plans pay off, the US might suddenly find itself behind a close trade partner it is not allowed to punish with trade sanctions.