Feb 01, 2024 524

South Korea Lays Out $470 Billion Plan to Build Chipmaking Hub


It envisions the world’s biggest chipmaking center near Seoul. Samsung and Hynix are leading a two-decade investment.

South Korea has revealed ambitious plans involving leading firms like Samsung Electronics Co. and SK Hynix Inc. to establish the world's largest chipmaking cluster, with an investment exceeding $470 billion. The government's blueprint, announced on Monday, outlines a massive investment of 622 trillion won ($471 billion) from the private sector by 2047. This investment will fund the construction of 13 new chip plants and three research facilities, augmenting the existing 21 fabs. Spanning from Pyeongtaek to Yongin, the cluster is projected to become the world's largest, capable of producing 7.7 million wafers monthly by 2030.

The envisaged investment marks a significant increase from when Seoul initially unveiled Samsung's and Hynix's plans in 2023. South Korea's government, collaborating closely with private firms on national priorities, has been enhancing its support for the domestic chip sector, which contributes about 16 percent of total exports. It aims to safeguard a crucial aspect of its economy amidst mounting global competition, with Japan and Taiwan aggressively investing in their own chip industries. The Korean government is offering substantial tax breaks to local chip firms as part of this commitment.

As part of the two-decade plan, Samsung and Hynix will construct their most advanced chip plants domestically. Samsung is focusing on foundry operations, investing 500 trillion won by 2047, while Hynix plans to invest 122 trillion won in memory in Yongin over the same period. Additionally, the region will accommodate smaller chip design and materials companies. The overarching goal is to enhance the country's self-sufficiency in semiconductors and increase its global market share of logic chip production to 10 percent by 2030, up from the current 3 percent.