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Silo Effect Impedes Growth of Korean Semiconductor Industry: Experts
Concerns over Semiconductor Imbalances
Silo Effect Impedes Growth of Korean Semiconductor Industry: Experts
  • By Michael Herh
  • September 27, 2018, 09:49
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Many experts say that the Korean semiconductor industry needs to nurture semiconductor design engineers to ensure the industry's continued growth.

There are a lot of concerns over imbalances in the Korean semiconductor industry. Some semiconductor industry experts say that it is difficult for Korea to maintain its status as a semiconductor powerhouse unless the Korean semiconductor industry overcomes the “silo phenomenon,” a lack of interaction and collaboration among different semiconductor sectors, given that chip design ability is increasingly growing important in the 4th Industrial Revolution era.

Professor Koo Yong-seo, a professor of electrical engineering and electronics at Dankook University, emphasized building a collaboration system between semiconductor companies. "In the case of Taiwan, MediaTek, the largest fabless maker, and TSMC, which ranks first in the foundry industry, enjoy an excellent collaboration system," he noted. “Without TSMC's help, MediaTek could not have grown. In Korea, however, there is no connection between foundries, such as Samsung Electronics and SK Hynix, and fabless companies such as DB Hitech."

They claimed that only certain semiconductor fields grew, giving rise to imbalances in the distribution of excellent human resources. "Professors as well as candidates for master’s and doctorate degrees are interested in memory semiconductors only. They are shunning system semiconductors,” said Kim Jong-seon, a professor at Hongik University.

In China, there are about 1,400 companies in the system semiconductor sector. In contrast, there are only about 100 Korean companies in this sector. This does not match the status of Korea as a memory powerhouse in the world semiconductor industry.

As Korean foundry companies are doing business mainly with large customers, it is difficult for Korean fabless companies, which are mostly venture businesses, to secure their foundations for growth in Korea. Ultimately, Korean fabless companies need to receive orders from foreign companies such as Taiwanese foundry companies but have limits in terms of competitiveness.

Many experts say that the Korean semiconductor industry needs to nurture semiconductor design engineers as artificial intelligence (AI) and central processing units (CPU), which are like brains for the 4th Industrial Revolution, all belong to the system semiconductor field. They advised the Korean semiconductor industry to expand the pool of engineers in the long term.

"People may think that China began to push for the promotion of its semiconductor industry a few years ago. But in reality, 20 to 30 years have passed since China began to implement such policies," said Song Yong-ho, a professor of fusion electronics engineering at Hanyang University. “Korea must give financial support to the Korean semiconductor industry and a connection among the industry, academia and research centers in accordance with a mid- to long-term master plan.

"Korea’s semiconductor talent pool will expand when Korea builds a structure where large corporations open more design assets (intellectual property) to the outside, and IP not used by research institutes and universities is commercialized through remodeling," Koo said.