$450 Billion: South Korea’s Plan to Become The Biggest in Chip Making

South Korean President Moon Jae-in holds his New Year press conference at the presidential Blue House in Seoul on January 10, 2019. (Photo by Jung Yeon-je / POOL / AFP)

Both Samsung and SK Hynix, along 151 more companies will be fueling the project. South Korea expects chip exports to double to $200 billion by 2030

South Korea has announced plans worth approximately $450 billion around chip manufacturing. The country plans to spend this mammoth amount around building the biggest chip making base in the world. The country has announced the investment and plans around a time when The US, China, as well as Europe, are looking to establish supremacy in the field. Several companies worldwide are also facing a shortage of semiconductors at the moment.

Semiconductors, as per South Korea’s Ministry of Trade, Industry and Energy, contribute the largest share of exports made by the country. The ministry expects chip exports to double to $200 billion by 2030. There was news of USA’s recently elected President Joe Biden seeking $37 billion in funding to rescue the ailing chip manufacturing industry in the United States, recently.

The South Korea government has plans to give incentives to domestic players in the form of tax holidays, lower interest rates, reinforced infrastructure and eased regulations.

153 companies to the task

The blueprint for making South Korea the biggest name in semiconductor manufacturing has been devised by an administration team led by the country’s president Moon Jae-in. A report by Bloomberg suggests that Samsung Electronics and SK Hynix will be investing more than 510 trillion won. This amount will be used for research and production of semiconductors. The plan envisages South Korea to hit the target by the year 2030.

Both Samsung and SK Hynix, along 151 more companies will be fueling the project. The president of the country is expecting a brief around the initiative from top executives soon. The ministry of trade (South Korea) compared semiconductors to rice and noted that the former as strategic weapons for winning the race towards enabling and achieving superior technology.

The government of the country plans to bring together all the elements of chip fabrication, starting from design to manufacturing, at one place. Calling it the ‘K-semiconductor belt’, the emphasis is on developing area south of Seoul into a chip manufacturing belt that stretches over tens of kilometres.

AI and data processing in mind

While both Samsung and Hynix are known to be the superheroes of making and supplying memory chips to the entire world, it looks like that the government of South Korea will now try to focus more on chips that are capable of doing advance logic computations. The demand for the same have been increasing sharply as devices have started to move towards the smart side.

Taiwan Semiconductor Manufacturing Corporation (TSMC) is known for making and supplying such advanced chips to nations and companies worldwide. The Bloomberg report suggests that Samsung is planning to advance in this area by buying and taking over some of Nvidia Corporation’s graphics card business. Samsung might also be looking towards pursuing a major share in Qualcomm’s mobile chips.

The ministry noted that Dutch semiconductor equipment maker ASML Holdings NV has already signaled about intentions to spend 240 billion won towards build a training center in Hwaseong. California-based Lam Research Corp., as per the ministry also has plans to almost more than double its capacity in South Korea.

South Korea, known as a security ally of the US, is also famous for being one of the biggest exporters to China. The country, which is already in a tight spot between the countries, may find execution a little difficult for its new plan.

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