Samsung said it will invest 300 trillion South Korean won in new semiconductor facilities in South Korea over the next 20 years. This is part of a broader technology investment plan by the South Korean government.
Cho Sung Joon | Bloomberg | Bloomberg | Getty Images
Samsung Electronics On Wednesday, the government announced plans to invest 300 trillion South Korean won ($228 billion) in a new semiconductor complex in South Korea as part of an aggressive push to take the lead in a key technology.
A Samsung spokesperson told CNBC that the investment will be made over a number of years until 2042.
The South Korean government is considering consolidating the largest technology companies to boost development in key areas. The government announced Wednesday that 550 trillion won will be invested by the private sector by 2026 in areas such as chips, displays, batteries and electric vehicles.
But there is a huge focus and geopolitical focus on semiconductors, the critical components that go into everything from smartphones to cars. South Korea’s broad move is seen as a way to keep up with the US’ own aggressive semiconductor investment.
“President Yoon Suk-yeol said that while it is important for high-tech industries such as semiconductors to grow through medium- to long-term plans, these plans should be advanced quickly as if it were a matter of life and death.Current global competition Given the situation,” Yoon’s spokesperson Lee Do-eun said in a briefing.
The new 300 trillion won chip complex Samsung is building is just outside Seoul, South Korea’s capital.
The South Korean government aims to create a “semiconductor megacluster” by linking semiconductor facilities in the region from Samsung to other companies. The idea is to connect various parts of his chain of semiconductor supply, from chip design to manufacturing.
“When choosing the new location, we took into account the synergies we see from our existing semiconductor clusters,” said Lee Chang-yang, South Korea’s Minister of Trade, Industry and Energy.
The South Korean government said the company will build five chip manufacturing facilities within the cluster.
Samsung is the world’s largest memory chip maker. These are semiconductors that are built into devices such as laptops and servers.Also based in Korea SK Hynixthe second largest memory chip maker.
Semiconductor competition intensifies
Semiconductors have become a highly politicized technology, fueled by two US strategies, creating complex dynamics among allies.
On the one hand, Washington is pushing to bring chip manufacturing back to U.S. shores, pledging to build factories from companies like Samsung and Taiwan’s TSMC, the largest contract chip maker.
Meanwhile, the United States has aimed Slow down China’s semiconductor development. Last year, Washington introduced sweeping rules aimed at cutting off China from acquiring or manufacturing key chips and components, as well as the tools needed to make them.
In a technology war with China, the United States has allied with South Korea, Japan, Taiwan, and the Netherlands to help cut China off from key technologies.
But at the same time, the US signed the Chips and Science Act. The legislation includes her $52 billion in support to chip-making companies to attract investment to the United States and boost the country’s standing in the semiconductor industry.
It created a competitive landscape among allies, even when allies were seeking partnerships.
“At the moment, every country is trying to build its own competitive edge. We are inundated with tax cuts and capital commitments from governments calling for onshore production of semiconductors,” he told CNBC.
“The urge to compete is stronger than the urge to cooperate. Incentives may change if planned incentives fail or if the semiconductor industry sees a downward trend in the investment cycle.“
samsung manufacturing push
For Samsung, government support could help it catch up with its largest contract chipmaker, TSMC. TSMC It manufactures some of the world’s most advanced semiconductors for companies such as Apple.
Samsung, known for its consumer electronics and memory chips, is expanding its contract chip manufacturing, or foundry, business.
In October, the company laid out an ambitious roadmap to produce the world’s most advanced chip by 2027.
South Korea’s Samsung shares closed 1.3% higher on Wednesday after the announcement of semiconductor investment plans.