South Korea will earmark 841 billion won ($697.4 million) for research and development of key materials and parts this year in a move to reduce dependency on foreign supplies and boost competitiveness of local industries, the industry ministry said Thursday.

It is up 22 percent from last year's budget, as the country has been ramping up efforts to nurture the materials and parts industry, particularly after Japan's control on exports of key products in 2019.

Of the budget, 321.8 billion won will be spent on R&D projects to secure key technologies for 185 major industry items, such as rare metals for batteries and advanced chemical and display materials, according to the Ministry of Trade, Industry and Energy.

The government will also allocate 199.1 billion won to support the development of technologies for major materials and components in nine sectors, including semiconductors, displays, bio and energy, it added.

The ministry will begin receiving applications from local firms and institutions this week and choose projects in April.

"We will implement our policy measures on supporting the development of major materials, parts and equipment without a hitch to ensure their stable supplies regardless of outside factors," a ministry official said.

In 2019, Japan imposed tighter regulations on exports to South Korea of three materials critical for the production of semiconductors and flexible displays, citing Seoul's lax control system of strategic items that can be diverted for military use.

South Korea views the Japanese moves as retaliation against 2018 South Korean Supreme Court rulings ordering Japanese firms to compensate South Korean victims of forced labor during Japan's 1910-45 colonial rule of the Korean Peninsula. (Yonhap)