The South Korean government will invest 200 billion won into research and development in automotive semiconductors, amid a global supply shortage.

The plan is to respond to rising demand in the short term but also to foster the sector into a next-generation growth industry in the long term.

The government on Wednesday held a meeting on innovative growth and announced a set of strategies to this effect.

Noting that demand for the key automobile component amid a global shift toward future cars, Finance Minister Hong Nam-ki said it is imperative to address supply and demand concerns, improve the supply chain and gain market advantage.

Domestic carmakers rely on imports for 98 percent of automotive chips.

As the shortage is expected to continue at least through the third quarter, the government will step up support through next year in developing related technologies with the goal of self-sufficiency and localization.