South Korea plans to build the world's largest chip manufacturing cluster in Gyeonggi Province by investing approximately $470 billion over the next 23 years in a large-scale chip manufacturing industrial complex, in collaboration with major electronics companies Samsung Electronics and SK Hynix.
To support this plan, the South Korean government has proposed measures including tax incentives for investment and initiatives to enhance competitiveness. South Korea aims to increase its self-sufficiency in essential materials, components, and equipment for chip production to 50% by 2030. Currently, the country dominates the production of DRAM and NAND memory chips used for data management and storage in PCs, smartphones, and SD cards, holding over 60% of the global market share. South Korea also aims to increase its market share in chips and other processors. Samsung is also seeking to surpass Taiwan's TSMC in wafer production – thin discs made from semiconductor materials, primarily silicon, that serve as the base for chip assemblies. South Korean President Yoon Suk-yeol stated that the ambitious large-scale industrial cluster is expected to create nearly 3.5 million jobs. To achieve this, he emphasized the need to expand nuclear power to meet the energy demands of the semiconductor industry.
South Korea's chip manufacturing cluster comprises various industrial parks in Gyeonggi Province, covering a total area of 21,000 hectares, equivalent to nearly 30,000 football fields. By 2047, the plan calls for the addition of 16 more chip manufacturing facilities to supplement the existing 19. Initially, three manufacturing plants and two chip research facilities are projected to be completed by 2027.
According to the South Korean Ministry of Industry, Samsung and SK Hynix plan to produce 7.1 million wafers per month by 2030. Samsung Electronics plans to invest 500 trillion won (US$375 billion) in the industrial complex, allocating 360 trillion won to six new manufacturing facilities in Yongin, located 33km south of Seoul. Additionally, Samsung will use 120 trillion won to build three new factories in the Pyeongtaek manufacturing complex, located 54km south of Seoul, along with three research facilities in Giheung. SK Hynix will contribute 122 trillion won to build four new factories in Yongin. In 2023, South Korea exported semiconductor goods worth US$129 billion, accounting for approximately 19% of the country's total exports. Reducing national chip production would severely impact the South Korean economy . The US is also rapidly establishing chip manufacturing facilities with subsidies totaling $52.7 billion.
Meanwhile, China is boosting the development of its domestic semiconductor industry after the US imposed strict restrictions on semiconductor exports. Japan is also not standing idly by, with a cluster of chip manufacturing plants, a collaboration between TSMC and Sony, being built on the island of Kyushu. Thanks to special, indefinite licenses, South Korean manufacturers have been exempted from US import restrictions and are allowed to export equipment and machinery to China. Samsung's and SK Hynix's NAND memory chip factories in China are benefiting from this.
HUY QUOC
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