South Korea Plans to Build the World's Largest Semiconductor Industry Supply Chain

2024-11-05 12:23:30 News & Society

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South Korea announces a 2.9 trillion yuan strategic plan to build the world's largest semiconductor industry supply chain.

According to Yonhap News Agency, the South Korean government held the "K-Semiconductor Strategy Report Conference" at Samsung Electronics' Pyeongtaek Plant on the 13th, and announced a strategic plan aimed at achieving the goal of a comprehensive semiconductor powerhouse.

Specifically, the South Korean government will work with related companies to build the world?s largest semiconductor industry supply chain in China by 2030-the "K-Semiconductor Industrial Belt", and establish a collection of semiconductor production, raw materials, components, equipment and cutting-edge equipment. High-efficiency industrial clusters integrating, design, etc.

As the core content of this strategic plan, the industrial supply chain is vertically connected with Banqiao, Qixing, Hwaseong, Pyeongtaek, Onyang and other cities from the north to the west covers Icheon, Yongin, and Cheongju in the east, showing a "K" Font.

According to the plan, the South Korean government will provide support for related companies to reduce or exempt taxes and expand finance and infrastructure. Among them, the tax deduction rate for semiconductor R&D and equipment investment will be increased to 40-50% and 10-20% at the highest. It is estimated that Samsung Electronics, SK Hynix and other companies will invest 510 trillion won (about 3 trillion yuan) within 10 years, and the investment this year will reach 41.8 trillion won.

In addition, the South Korean government plans to set up a new 1 trillion won special fund for semiconductor equipment investment to provide support for corporate equipment investment at low-interest rates. The South Korean government predicts that if the plan can be successfully implemented, South Korea?s annual semiconductor exports will increase from US$99.2 billion in 2020 to US$200 billion in 2030, and related jobs will also increase to 270,000.

South Korea also plans to attract more advanced technology investment from abroad. The Dutch semiconductor equipment manufacturer ASML intends to spend a huge amount of money to establish a training center in South Korea, and the US semiconductor equipment giant Colin R&D also plans to double its production capacity in South Korea. South Korea hopes to train 36,000 chip experts between 2022 and 2031, invest special funds for chip research and development, and discuss legislation specifically designed to help the development of the semiconductor industry.

Bloomberg said on the 13th that South Korea?s move comes at a time when the United States, China and the European Union are seeking to enhance their respective semiconductor strengths. The global chip shortage exposes the world?s dependence on one of the few Asian manufacturers. Nowadays, the shortage of chips is spreading from the automobile industry to the fields of smartphones and display devices, forcing many countries to put semiconductor industry issues on their priority agendas.

As a security ally of the United States and a major trading partner of China, South Korea hopes to strengthen its own semiconductor production capabilities. South Korea?s Ministry of Trade, Industry and Energy stated that semiconductors account for the largest share of South Korea?s exports, and chip exports are expected to double to US$200 billion by 2030.

Samsung and Hynix produce most of the chips and basic semiconductors used for storage functions in the world. But South Korea lags behind TSMC in the production of logic chips used to process complex operations such as artificial intelligence and data processing.

The Minister of Industry, Trade and Resources of Korea, Moon Seung-yu, stated that the government formulated the above-mentioned strategy when the global semiconductor market was re-arranged, aiming to create a supply base that can stably meet global demand and help Korean companies dominate the global semiconductor supply chain.