Samsung, the South Korean electronics giant, has announced plans to invest around $230.8 billion over 20 years in the South Korean government’s push to develop a mega semiconductor hub in the country. This investment will be put towards building five chip factories, with the aim of establishing South Korea as a leading country in the middle of fierce global competition over advanced industries.
Building a Mega Cluster for Semiconductor Ecosystem
Samsung’s investment will serve as a key base for the semiconductor ecosystem, according to South Korea’s Ministry of Trade, Industry, and Energy. The ministry also plans to secure around $422 billion (500 trillion) in private-sector investment to develop the mega semiconductor hub. The proposed plan includes offering incentives to companies in high-tech industries, such as expanded tax breaks and infrastructure support.
Emulating Taiwan’s Clustering Effect
South Korea aims to emulate Taiwan’s clustering effect, where science parks form a massive cluster that attracts numerous other companies both upstream and downstream in the supply chain. The South Korean government expects the mega cluster to attract investment, create jobs, and accelerate the development of the semiconductor industry.
Semiconductor Dispute between the US and China
Semiconductors are at the center of a bitter dispute between the US and China, and South Korea has also raised concerns over the US policy on semiconductors. In October, the US announced that it would require licenses for companies exporting chips to China using US tools or software, no matter where they are made in the world. Due to export controls imposed by Washington, China has often referred to the US as a “tech hegemony.”
Other Major Microprocessor Manufacturers in South Korea
SK Hynix and other major microprocessor manufacturers are already based in South Korea. The proposed mega semiconductor hub would further boost South Korea’s position as a major player in the semiconductor industry. The global demand for semiconductors is expected to continue to rise, with companies such as Samsung and SK Hynix well-positioned to meet this demand.
Conclusion
Samsung’s investment in South Korea’s mega semiconductor hub is a significant move that highlights the country’s commitment to advanced industries such as semiconductors. The proposed hub is expected to attract investment, create jobs, and accelerate the development of the semiconductor industry. Despite concerns over the US policy on semiconductors, South Korea remains well-positioned as a major player in the industry.
