SEOUL, May 23 (Reuters) - South Korea announced on

Thursday a 26 trillion won ($19 billion) support package for the

country's vital semiconductor industry, the country's

presidential office said.

Under the package, President Yoon Suk Yeol said the

government planned a financial support programme for chips worth

about 17 trillion won through state-run Korea Development Bank

to back large-scale investments by semiconductor companies.

Yoon said a 1 trillion won fund would be set up to support

equipment makers and fabless companies, which design chips but

outsource their manufacturing.

Yoon also asked the industry ministry to come up with

innovative measures to strengthen South Korea's competitiveness

in the non-memory chip sector, the presidential office said.

The updated support package is bigger than plans flagged by

the country's Finance Minister Choi Sang-mok earlier this month,

when he said the government was targeting support for chip

investments and research worth more than 10 trillion won.

South Korea's chip industry accounted for 18% of the

country's total exports in April, though it has been lagging in

some areas.

South Korea's market share of the fabless sector, which

includes companies like U.S. giant Nvidia ( NVDA ), stood at

about 1% and there was a gap between South Korean chipmakers and

the leading contract chipmakers like Taiwan's TSMC,

Yoon's office said.

The country, which is home to the world's top memory chip

makers Samsung Electronics ( SSNLF ) and SK Hynix,

is building a mega chip cluster in Yongin, south of the capital

Seoul, touted as the world's largest high-tech chipmaking

complex to attract chip equipment and fabless companies.

In January, Yoon, who has vowed to pour all possible

resources into winning the "war" over chips, said he would

extend tax credits on investments in the domestic semiconductor

industry to boost employment and attract more talent.