South Korea, with leading firms Samsung Electronics and SK Hynix, plans to invest over US$470 billion to establish the world’s largest chipmaking cluster. The investment will fund the construction of 13 new chip plants and three research facilities, aiming to produce 7.7 million wafers monthly by 2030. The plan is a response to increasing global competition in the chip sector, with the government offering significant tax breaks to local chip firms. The goal is to improve South Korea’s self-sufficiency in semiconductors and increase its global market share of logic chip production to 10% by 2030.
South Korea’s Ambitious Chipmaking Plan
South Korea has announced a comprehensive plan to establish the world’s largest chipmaking cluster, with major companies such as Samsung Electronics and SK Hynix leading the charge. The government has outlined a blueprint involving an investment of 622 trillion won (US$471 billion) from the private sector, which will be utilized over the years leading up to 2047. As reported by the South China Morning Post.
The plan involves the construction of 13 new chip plants and three research facilities, in addition to the existing 21 fabs. The area spanning from Pyeongtaek to Yongin is expected to become the largest chipmaking region in the world, with a projected capacity to produce 7.7 million wafers monthly by 2030.
Government Support and Global Competition
The South Korean government, which collaborates closely with private firms on national projects, has been increasing its support for the domestic chip sector, which accounts for about 16% of total exports. The government is committed to protecting this crucial sector of its economy amidst rising global competition, particularly from Japan and Taiwan.
As part of this two-decade plan, Samsung and Hynix are set to build their most advanced chip plants domestically. Samsung is focusing on foundry – manufacturing chips for other firms – as part of a 500 trillion won investment by 2047. Hynix, a smaller competitor, plans to invest 122 trillion won in memory in Yongin over the same period.
Enhancing Self-Sufficiency and Market Share
The government’s overarching ambition is to improve the country’s self-sufficiency in semiconductors while increasing its market share of global logic chip production to 10% by 2030 from the current 3%. The new mega cluster will also house smaller chip design and materials companies.
The industry ministry has assured that the new mega cluster will be supplied with enough electricity and water for operation and will benefit from new tax exemptions for certain key chip technologies.
Development of Specialized Hubs and R&D Centre
Pangyo, where fabless firms are currently concentrated, will become the hub of low-powered, high-performance AI chips. Suwon will serve as a central test bed for compound semiconductors, while Pyeongtaek will host a new semiconductor R&D centre at the Korea Advanced Institute of Science and Technology’s new campus, set to be completed by 2029.
Economic Impact and Job Creation
The construction of new fabs within the new mega cluster is expected to create jobs for 70,000 experts, as well as 40,000 new positions at companies supplying parts and materials. The industry ministry estimates that the project will generate employment opportunities for 3.46 million people, considering additional job creation effects from the cluster.
Minister of Trade, Industry and Energy Ahn Duk-geun stated, “We will make efforts to see outbound shipments of semiconductors, the country’s No. 1 export, reach US$120 billion this year. The new mega cluster’s success will further spread to other parts of the nation and become the world’s leading chip hub.”
“Nuclear power plants in the country will provide stable power supplies to the new chip cluster,” President Yoon Suk-yeol said at a town hall meeting announcing the government’s plans at Sungkyunkwan University’s Natural Science Campus in Suwon. “We are already witnessing overseas investment firms flocking in to explore potential business opportunities associated with the emerging chip cluster. This trend represents a continuation of last year’s record-breaking influx of foreign investments into the country.”
“We will make efforts to see outbound shipments of semiconductors, the country’s No. 1 export, reach US$120 billion this year,” Minister of Trade, Industry and Energy Ahn Duk-geun said. “The new mega cluster’s success will further spread to other parts of the nation and become the world’s leading chip hub.”
Summary
South Korea plans to invest over US$470 billion to establish the world’s largest chipmaking hub, aiming to produce 7.7 million wafers monthly by 2030. The investment will fund the construction of 13 new chip plants and three research facilities, with the goal of increasing South Korea’s global market share of logic chip production from 3% to 10% by 2030.
- South Korea has announced plans to invest US$470 billion to establish the world’s largest chipmaking hub.
- Leading firms such as Samsung Electronics and SK Hynix are involved in the project.
- The investment will be used to build 13 new chip plants and three research facilities, with the aim of producing 7.7 million wafers monthly by 2030.
- The South Korean government is also offering significant tax breaks to local chip firms.
- The overarching goal is to improve South Korea’s self-sufficiency in semiconductors and increase its global market share of logic chip production to 10% by 2030.
- The new mega cluster will also create jobs for 70,000 experts and 40,000 new positions at companies supplying parts and materials.
- President Yoon Suk-yeol and Minister of Trade, Industry and Energy Ahn Duk-geun have both expressed their support for the project.
- The project is part of a wider global trend of countries investing heavily in their domestic chip sectors to safeguard supply.
