South Korea has announced that they plan on spending $450 billion over the next 9 years to try to take the lead in manufacturing semiconductors. This can be seen as an aggressive move as President Biden has requested Congress to invest just 50 Billion for US-based semiconductors manufacturers. Over the same time frame.
Bloomberg has reported that there are a total of 153 companies with Samsung and SK Hynix being two of the major beneficiaries on the new bill. South Korean President Moon Jae-in’s administration intends to safeguard one of their nation’s most crucial industries in their economy. By heavily financing them over the next decade.
“Our government will unite with companies to form a semiconductor powerhouse,”President Moon Jae-in of South Korea
Samsung and SK Hynix have already made announcements for spending over the next decade. With Samsung expecting to spend 33.7 Billion on ongoing processes and creating new foundries. SK Hynix on the other hand has already stepped back a little on their announced plans to build four new plants in Yongin with an estimated cost of around 106 Billion. Instead, they will be allocating 97 Billion into building capacity expansions at their current facilities.
South Korea makes the majority of the world’s Memory Chips which are basic conductors that handle storage for devices. With the majority of these currently being made by Samsung and Hynix respectfully. But one aspect that these companies lag behind is the creation of advanced logic chips. That is used to calculate complex tasks such as AI and data processing. Currently, this is dominated by Taiwan Semiconductor Manufacturing Co.
“The entire semiconductor industry is facing a watershed moment and now is the time to chart out a plan for long-term strategy and investment,”Kim Ki-nam, Samsung vice
Samsung will be looking to expand into taking some market share away from Nvidia Corp and compete more aggressively in pursuing a much larger share of QUALCOMM’s mobile chip business. With SK Hynix right behind them in expressing interest in going after logic chips.
The importance of semiconductor research for national security is of utmost importance and especially after the chip shortage that we have been going through. We should expect to see the EU taking an interest in joining this movement and maybe even the United States investing more into their program.