SEOUL, March 5 (Reuters) - South Korea will establish a

$34 billion policy fund to provide financial support to domestic

companies involved in strategic technologies such as chips and

autos amid intensifying global competition and protectionism,

the government said on Wednesday.

"Competitiveness in advanced strategic industries has

emerged to be the core of national economic security amid

heightened external uncertainty under the new U.S.

administration," the government said, calling it a "war without

gun smoke".

Since returning to office in January, U.S. President Donald

Trump has initiated a series of tariff threats targeting major

trading partners and various industries, such as chips, autos

and biopharmaceuticals.

The state-run Korea Development Bank's 50 trillion won

($34.37 billion) fund will be offered to companies in national

strategic industries in the form of cheap loans and other

investments over the next five years.

South Korea in recent years has designated 12 industries as

"national strategic technologies" with targeted financial

support and protection to respond to intensifying global

competition and the fragmentation of supply chains.

These include industries such as semiconductors, future

mobility, rechargeable batteries, biopharmaceuticals, aerospace

and artificial intelligence, among others.

A financial support package prepared specifically for the

semiconductor industry last year will also be integrated into

the fund.

($1 = 1,454.7000 won)