South Korea’s $470B vision: crafting a global chipmaking powerhouse

The government on Monday outlined a blueprint involving investment of 622 trillion won (US$471 billion) from the private sector in the years leading up to 2047.

South Korea revealed plans to spend over US$470 billion creating the largest chipmaking cluster in the world, thanks to the efforts of industry leaders like Samsung Electronics and SK Hynix.

The government on Monday outlined a blueprint involving investment of 622 trillion won (US$471 billion) from the private sector in the years leading up to 2047.

The construction of a massive chipmaking complex that will house 13 new chip plants and three research facilities is the centrepiece of South Korea’s calculated move. This complex is positioned to grow to be the biggest in the world, covering the area from Pyeongtaek to Yongin. With the cluster expected to be fully operational by 2030, South Korea’s leadership in semiconductor manufacturing will be cemented as it is expected to produce an astounding 7.7 million wafers per month.

The $470 billion investment that is anticipated represents a substantial increase from the initial plans that were announced in 2023, demonstrating the urgency and dedication with which South Korea views its semiconductor industry. The government, working with private companies, has been stepping up its support for the country’s chip industry, which accounts for about 16% of all exports.

The government promises to uphold this cornerstone of the South Korean economy in the face of intensifying international competition as part of its commitment. Several countries, including Taiwan and Japan, have been making significant investments in their chip industries, which is why South Korea gave significant tax breaks to domestic chip companies. The goal of this proactive approach is to guarantee the industry’s continued expansion and competitiveness in the global arena.

Industry titans Samsung and Hynix are essential to the success of South Korea’s chipmaking hub. Both businesses intend to build the most advanced chip plants in the country as part of the two-decade agreement. With an investment of 500 trillion won by 2047, Samsung is a particularly large-scale player in the foundry services space. Yongin will receive 122 trillion won in memory investment over the same period from Hynix, a smaller rival.

The government’s vision for the expansion and development of South Korea’s chipmaking capabilities is in line with the strategic moves made by Samsung and Hynix, which highlight this alignment of interests. Assuring the country’s technological leadership and competitiveness requires close collaboration between the public and private sectors.

The new mega chip cluster, according to the South Korean government, will be a complete ecosystem that will include smaller chip design and materials companies in addition to larger chip manufacturing facilities. The main objective is to improve the nation’s semiconductor self-sufficiency and to raise its market share of the world’s logic chip production from the current 3% to 10% by 2030.