Seoul, Mar 29 (IANS): Amid the semiconductor war between the US and China, South Korea said on Monday it has granted the final approval to SK hynix's 120 trillion-won ($106 billion) project to build a new semiconductor complex, a move that could ease supply shortages in the global market.

South Korea's No 2 chipmaker (after Samsung) has completed all necessary administrative procedures to go ahead with the project to build the complex in Yongin, about 50 kms south of Seoul, according to the Ministry of Trade, Industry and Energy.

The announcement came about two years after the company vowed to build a 4.15 million-square-meter industrial cluster, which will house four new semiconductor fabrication plants.

Some 50 subcontractors and suppliers of the chipmaker will be relocated to the zone as well. When completed, the cluster will boast a monthly production capacity of 800,000 sheets, reports Yonhap news agency.

With the groundbreaking expected to take place in the fourth quarter of this year, the first fabrication plant is predicted to be completed in 2025.

South Korea said the latest investment is expected to ease supply shortages in the global market as well.

"As the chip industry is the key pillar of the country's exports, the government will spare no efforts to solve any potential problems throughout the project, so that the construction can start this year as scheduled," the ministry added.

South Korea's exports of chips came to $99.1 billion in 2020, up 5.6 per cent from a year earlier. The segment took up 20 per cent of the combined outbound shipments.