The South Korean government is collaborating with Samsung Electronics and SK Hynix to execute a significant investment initiative aimed at maintaining the country's leadership in the global semiconductor market. President Yoon Suk Yeol has personally detailed the plan, which encompasses a sprawling 21 million square meter industrial zone within the southern Gyeonggi Province. The comprehensive strategy involves expanding the existing 21 fabrication facilities in the area, establishing fabless plants in Pangyo, and constructing foundry and memory chip production facilities in Hwaseong, Yongin, Icheon, and Pyeongtaek.
Furthermore, there will be dedicated zones for the manufacture of materials, parts, and equipment in Anseong, as well as R&D centers based in Giheung and Suwon. This ambitious plan is set to run until 2047 and will require a substantial 622 trillion won (approximately USD 472 billion) in government support. Notably, Samsung Electronics plans to invest 500 trillion won in nine new fabs, while SK Hynix will allocate 122 trillion won to develop four new fabs.
The government leaders evidently view this investment as a crucial strategic move. The US, Japan, India, and Europe are all intensifying efforts to strengthen their domestic supply chains, aiming to reduce reliance on Taiwan and China. Despite South Korea's robust domestic companies, there's recognition that future dominance is not guaranteed.
In tandem with the investment plan, the government has extended the tax break on semiconductor investments, originally scheduled to expire this year. It is anticipated that the new project could generate 3.46 million jobs and potentially secure 10% of the global non-memory chip market by 2030, an increase from the current 3%.
