According to South Korean media reports, the South Korean government is considering creating a new government-funded contract chip manufacturer called KSMC (Korea Semiconductor Manufacturing Corporation), despite Samsung foundry's dominance in the global chip contract manufacturing sector. This program aims to address the structural problems currently facing the Korean semiconductor industry and ensure Korea's competitiveness in the global semiconductor industry.
Investment & Returns: The Great Promise Behind Huge Investments
The South Korean government is considering a large-scale investment in KSMC. It is estimated that the investment of about 20 trillion won (about $13.9 billion) will bring up to 300 trillion won (about $208.7 billion) to South Korea's economic benefits by 2045. This expected return demonstrates the Korean government's potential and confidence in the future growth of the semiconductor industry, and this plan is not only to expand the country's production capacity, but also to enhance the competitiveness of its entire industrial chain.
However, industry experts and academics point out that KSMC's success has not been easy. A key question is whether the $13.9 billion investment is enough to create a competitive manufacturer in the technology and market competition in the global semiconductor industry. In addition, KSMC, as a publicly funded company, is still a difficult problem to be solved by developing advanced manufacturing technologies and attracting enough customer orders to achieve profitability.
Addressing the industry's structural weaknesses: weaning itself off Samsung
The structural weakness that South Korea's semiconductor industry is currently facing is mainly reflected in its over-reliance on Samsung. Although Samsung is a global leader in memory chip manufacturing, South Korea still lags behind countries such as Taiwan in terms of sub-10nm advanced process nodes and logic chip manufacturing technology. At the same time, South Korea's semiconductor industry still suffers from a lack of mature process technology, a widening technology gap, and slow growth of fabless companies.
KSMC's proposal is an attempt to address these issues by providing more choice and competition. With the support of state funds, KSMC will focus on R&D and investment in advanced technologies that are urgently needed in the Korean semiconductor industry, especially in the R&D of traditional processes and mature nodes, so as to provide more growth opportunities for small and medium-sized chip companies and occupy a place in the global industrial chain.
Challenges and countermeasures in the Korean semiconductor industry
Although South Korea is the world's largest memory manufacturer, it still lags far behind Taiwan in terms of logic process technology and chip design. This widening technology gap has put tremendous competitive pressure on the Korean semiconductor industry. At the same time, other challenges facing South Korea include a lack of investment attractiveness, a shortage of talent, and excessive regulatory restrictions, all of which can constrain the industry.
In response to these problems, leading companies in the Korean semiconductor industry, such as SK hynix, have proposed that Samsung's old production line be used for traditional process technology, with the aim of reducing capital investment and increasing existing production capacity. At the same time, the National Academy of Engineering of Korea (NAEK) called on the government to strengthen R&D support and provide financial incentives, such as tax incentives and subsidies, to incentivize technological innovation and attract more investment.
In addition, the South Korean government should also reduce some of the regulatory burdens on the semiconductor industry, such as restrictions on working hours, etc., to promote the flexibility and development potential of the industry.
Pictured: South Korea is rumored to build KSMC to compete with TSMC (Source: TSMC).
Successful experience of Taiwan's semiconductor ecosystem
KSMC's vision is not only a domestic industrial strategy, but also a reference to Taiwan's semiconductor ecosystem. Taiwan's semiconductor industry has successfully created a vibrant industrial ecosystem through government policy support, allowing more than 250 fabless companies in the Hsinchu Science Park to thrive. These companies can rely on the advanced technology and production capacity of leading foundries such as TSMC to jointly promote the development of Taiwan's semiconductor industry.
By replicating Taiwan's successful model, South Korea hopes to form a strong ecosystem between the new generation of chipmakers and small and medium-sized enterprises. Through government funding and policy support, KSMC will not only provide technical support to domestic enterprises, but also promote the healthy development of the entire semiconductor industry, thereby enhancing global competitiveness.
The Significance of the KSMC Proposal: The Future Industry Landscape
KSMC's proposal represents South Korea's ambition to further consolidate its position in the global semiconductor race. Through this plan, South Korea not only hopes to solve the infrastructure problems of the domestic chip industry, but also hopes to improve its voice in the global supply chain by building a complete semiconductor industry ecosystem.
Experts generally agree that by investing in a timely manner and focusing on ecosystem building, South Korea will not only be able to bridge the technological gap with its international competitors, but also be able to achieve significant economic returns in the long run. The success of KSMC will not only help improve Korea's technological level in the field of memory and logic processes, but also bring new changes to the global semiconductor industry.
Conclusion
As a key component of the future of Korea's semiconductor industry, KSMC is responsible for enhancing the country's industrial competitiveness, attracting global investment, and creating economic benefits. With the support of the government and the promotion of policies, the Korean semiconductor industry is expected to get out of the predicament with the help of this plan and meet broader development opportunities in the future. With the continuous innovation of technology and the continuous improvement of the ecosystem, South Korea will occupy a more important position in the global semiconductor industry and make new contributions to global technological innovation and economic growth.
