Variations on a Theme

The Ministry of Trade, Industry and Energy announced on March 16 that it would help at least 10 fabless companies reach one trillion won in sales each by 2035 and help Samsung Electronics produce their AI and automotive chips so that South Korea’s competitiveness can be enhanced in the non-memory chip sector. At present, the sector accounts for 60 percent of the global semiconductor market and South Korea’s share in the sector stands at 3 percent.

The government is planning to invest 300 trillion won (US$230 billion) to build the world’s largest non-memory chip cluster in Yongin. About 150 fabless companies, material, component and equipment suppliers, and research centers are expected to be housed there.

In addition, the government is going to expand contact between Samsung Electronics and domestic fabless companies. Samsung Electronics’ foundry business is currently revolving around foreign clients, such as Qualcomm and AMD, and the fabless companies have had to find manufacturers abroad, including in Taiwan and China, which has hindered timely production.

According to the government’s plan, R&D support in the semiconductor industry will be approximately 3.2 trillion won (US$2.5 billion), which is divided into 442 billion won (US$340 million) in power chip R&D, 665.3 billion won (US$511.1 million) in automotive chip R&D, and 2.1 trillion won (US$1.6 billion) in AI chip R&D.

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