More Investment Needed in Non-memory Chip Sector
The Korea Institute for Industrial Economics and Trade (KIET) said in its report on May 1 that the global semiconductor supply chain is likely to be reshaped in 2025, and then it will be difficult for South Korea to maintain its ambiguous neutrality between the United States and China.
“This means South Korea should join the semiconductor industry alliance led by the United States,” it said, adding, “At the same time, the South Korean government needs to invest more in the non-memory chip sector while further strengthening the manufacturing side so that the semiconductor industry of South Korea can become weak point-free.”
TSMC is planning to build five additional foundries in Arizona by 2024. Its plant construction in Kumamoto started on March 21 for completion in 2024. Samsung Electronics is planning to open a new foundry in Texas in 2024 after groundbreaking scheduled for this quarter. Intel is speeding up its plant construction projects in Arizona, Ohio and Germany.
“Semiconductor production in the United States, Europe and Japan is likely to increase down the road to result in more global supply chain diversification, and a position in the alliance is required to lead the chain in the future,” the institute commented, continuing, “Demand in other regions such as ASEAN will increase even when exports to China are not smooth, and the supply chain’s dependence on China will continue to fall.”
U.S. President Joe Biden, who is scheduled to stay in South Korea on May 20 to 22, is expected to become the first U.S. president to visit a Samsung Electronics plant in South Korea. “This implies that the U.S.-led semiconductor supply chain reshaping for the purpose of excluding China will accelerate,” said an industry source, adding, “It is in the same context that the United States proposed a new alliance of South Korea, Japan, Taiwan and itself in March this year.”