SOUTH KOREA REPORT
The South Korean government announced a plan for a semiconductor industrial park in which Samsung Electronics and SK Hynix will invest a total of 622 trillion won (approx. $470 Billion). With Japan and Taiwan aggressively investing in the semiconductor industry, the government aims to compete with them by establishing the world’s largest base and stabilizing the supply of semiconductors to Korea.
According to the plan announced by the government, Samsung Electronics and SK Hynix plan to invest 500 trillion won and 122 trillion won, respectively, by 2047. In addition to the existing 21 factories, 13 new semiconductor factories and 3 research facilities will be built. The semiconductor industrial park, which stretches from Pyeongtaek to Yongming, is expected to become the world’s largest manufacturing base with a monthly production capacity of 7.7 million wafers by 2030.
The amount of investment is a significant increase from the plan first revealed by the government in 2023. The Korean government, which works closely with the private sector in its national responsibilities, is increasing its support for the semiconductor sector, which accounts for about 16% of total exports.
Source: Toyo Keizai
PSR Analysis: I was very surprised by the size of the investment. It is already well known that the Korean government has placed semiconductors at the center of its economic development, and if this plan is realized, it will create an extremely large semiconductor industry cluster in Korea, even by global standards.
Although most observers currently believe that the semiconductor industry will grow significantly in the future, I would point out that as semiconductor research and production increase around the world, price competition will intensify and it is uncertain whether the industry will continue to earn at current profit levels. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
