South Korea outlines $450 billion chip investment push

Posted on Friday, May 14 2021 @ 13:56 CEST by Thomas De Maesschalck
South Korea has joined the race to propel its domestic chip making industry to the next level. There's been a big push in the United States to bring back chip production and the EU is pitching its own version to become more self-sufficient in the electronics market. Now South Korea is rearing its head too as President Moon Jae-in’s administration outlined a blueprint to safeguard the country's electronics industry.

South Korea envisions K-semiconductor belt

Not wanting to lose its edge over other countries, South Korea intends to build a "K-semiconductor belt" that stretches dozens of kilometers south of Seoul. The goal here is to bring together fabless chip makers, chip making firms, and suppliers in a new hotspot for innovation.

South Korea is a powerhouse in terms of memory chips, but is lagging in terms of logic chip production. The South Korean government will support its chip industry via tax breaks, lower interest rates, looser regulation, and infrastructure development. Furthermore, South Korea's plan also takes care of adequate water supply as well as reinforced power supply.
”South Korea is essentially beckoning global suppliers to come and work with its homegrown chipmakers so it can build an ecosystem on its soil rather than see them relocate to the U.S. and elsewhere,” said Kim Yang-paeng, semiconductor analyst at the Korea Institute for Industrial Economics and Trade. “Broadening its investment to foundries and logic chips also guarantees that it has something to fall back on should anything go wrong with the memory chip industry that it’s dominant in.” -- Yahoo News
Over the next decade, South Korea is expected to spend roughly $450 billion. Samsung and Hynix are major driving forces here. Samsung is ramping up its spending by 30 percent to $151 billion through 2030, while Hynix will invest $106 billion for four new plants in Yongin plus $97 billion to upgrade and expand existing facilities.

South Korea share of chip making globally

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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