March 24, 2023
With an estimated $230 billion investment from memory chip juggernaut Samsung Electronics, South Korea claims it will construct a sizable facility to manufacture computer chips in the greater Seoul region.
President Yoon Suk Yeol revealed the plans on Wednesday, and the electronics behemoth later verified them.
According to him, the Seoul Metropolitan Area will house the biggest new “high-tech system semiconductor cluster” in the entire world thanks to significant private investment totaling nearly 300 trillion Korean won.
Additionally, in conjunction with the current memory semiconductor manufacturing complexes, we will expand the “semiconductor mega cluster” to become the biggest in the world.
According to a government statement, the chip cluster would be situated in the Seoul Metropolitan Area’s Gyeonggi province, and the overall expenditure would be finished in about 20 years.
According to the statement, which provided no additional information, the nation will modify its Industrial Technology Protection Act to safeguard intellectual property.
Samsung (SSNLF) announced a plan in May of last year to invest more than $350 billion in its companies and add tens of thousands of new jobs by the year 2026. It declared that it would put most of its money into key industries like chip manufacturing and biopharmaceuticals.
It wasn’t immediately obvious whether the investment that had been previously announced would overlap with the one that the government had announced on Wednesday.
According to Sanjeev Rana, a CLSA analyst, Samsung’s investment plans appear to translate into an average of about 15 trillion won being spent annually on its foundry or contract manufacturing business over the next two decades, which is comparable to its current annual capital expenditure in that area.
He stated, “This is in accordance with market expectations.
The electronics section of Samsung is best known for its well-liked smartphones and televisions. The business has shifted its focus more toward being a supplier of semiconductors in recent years as shortages affect manufacturers all over the world.
Only two locations, Taiwan and South Korea, produce the overwhelming majority of the world’s sophisticated microchips. South Korea is eager to compete with Taiwan’s larger and more dominant sector.
Concerns about the stability of the global supply chain have been raised as a result of the concentration of so much vital chip production in just two locations, particularly given that China and North Korea, the neighbors of South Korea and Taiwan, respectively, are militarily threatening both countries.
Major economies have expressed worry over the past few years about losing access to semiconductors, especially as political and economic conflict between China and the United States has increased.
Major corporations like Apple and various governments, including Washington, have requested that semiconductor firms localize their operations.
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