South Korea’s Plan to Dominate the Semiconductor Industry and Create Millions of Jobs

If Yoon Suk Yeol, the current president of South Korea, has his way, his country will become one of the largest global powers in the semiconductor industry in the future. The country is already the leading manufacturer of memory chips. With a long-term plan that is unique in the world, the nation is now set to take a leading position in other chip categories, reports the Handelsblatt. This is expected to create at least three million high-quality jobs in the sector over the next 20 years.

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South Korea is investing in the chip industry

To achieve this, Yoon Suk Yeol is not relying on subsidies, but rather on tax breaks for investments in the chip industry. Loans to industry are also expected to increase by around 20 percent to around six billion dollars per year over the next three years. The President also recently announced that he would massively expand energy and water supplies. He hopes that South Korea’s chip manufacturers will invest the equivalent of around 430 billion euros in new chip factories in his country by 2047.

The lack of subsidies is relatively unique. In Germany, the federal government wants to give away ten billion euros alone to lure the US company Intel to Saxony-Anhalt. The Taiwanese contract manufacturer TSMC is expected to collect another five billion so that it can set up shop in Dresden. The USA and Japan are also distributing billions to chip companies so that they invest in the country.

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Samsung and SK Hynix secure a strong position

However, South Korea does not need this. This is due to the country’s two largest semiconductor manufacturers, Samsung and SK Hynix. Samsung is the second largest chip producer in the world and a leader in memory chips. South Korea’s largest company in terms of sales has been pushing hard into contract manufacturing for other chip companies for some time now. This market has so far been dominated by the chip giant TSMC from Taiwan. SK Hynix is ​​the sixth largest semiconductor manufacturer in the world, number two in memory chips and also a competitor to Samsung.

Both companies already operate 21 chip factories in the country. According to the government’s plan, 16 more factories are to be added, including three for research purposes. These semiconductors are becoming increasingly important for artificial intelligence applications. AI accelerators, such as those sold by Nvidia, require increasingly more powerful memory chips. The market value of SK Hynix will therefore double in the next three years, CEO Kwak Noh-Jung recently promised.

In addition, the South Korean government wants to promote so-called fabless companies that design chips but do not produce them themselves. You should then have them manufactured by Samsung. One of the world’s largest chip clusters is to be built in Gyeonggi Province, south of the capital Seoul. The government assumes that investments in the coming years will increase South Korea’s share of non-memory chip production from currently around three percent to ten percent in 2030.

2024-01-23 00:47:31
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