Semiconductor industry in South Korea
In South Korea, the semiconductor industry has continued to grow since the 1980s due to the heavy use of semiconductors in computers and other devices. South Korea held a 17.7 percent share in the global semiconductor market in 2022, and continued to be the second largest in the world for the 10th consecutive year since 2013.[1]
The country accounted for 60.5% of the global memory semiconductor market, with a DRAM market share of 70.5% and a NAND market share of 52.6%. South Korea is continuously focusing on R&D and investment to maintain its competitive advantage. In addition, South Korea is pushing to expand its foundry market share based on ultra-fine processing technology. The country accounts for 17.3% of the global foundry market.[1]
- South Korea (60.5%)
- other countries (39.5%)
- South Korea (70.5%)
- other countries (29.5%)
- South Korea (52.6%)
- other countries (47.4%)
Timeline
[edit]The history of Korea's semiconductor industry began in 1965.[2]
- In 1983: South Korea became the third country in the world to develop 64K DRAM after the U.S. and Japan.
- In 1992: South Korea rose to the top of the DRAM market.
- In 2013: South Korea commercialized the world's first 3D V-NAND flash memory.
Historical Context
[edit]In the early stages of South Korea's semiconductor industry, the private sector took initiative in the investment and production of semiconductors.[3] Manufacturers called for an intervention, as a result of a decline in government involvement.[4] Samsung Electronics was one of the leaders in the development of semiconductor production and business. In 1978, the founder of the Samsung Group, Lee Byung-chul, established Samsung Semiconductor, before he continued to build the foundation of the semiconductor industry in South Korea.[5] By the end of 1983, Samsung developed he 64K DRAM, and led South Korea to become the third country in the world to develop 64K DRAM,[6] following Japan, who was the first in 1976,[7] and then the U.S. in 1981.[8]
Domestic Policy Measures
[edit]In response, South Korea passed the K-CHIPS Act, which provides tax credits of up to 25% for facility investments and up to 50% for research and development. The legislation also streamlines government regulation to facilitate industry growth. Additionally, South Korea has continued to expand domestic semiconductor infrastructure, including plans to construct a large-scale semiconductor cluster near Seoul with substantial private-sector investment.[9]
Major companies
[edit]Semiconductor cluster
[edit]The South Korean government announced in January 2024 its plan to invest about $470 billion over the next 23 years to build the world's largest semiconductor cluster in a large production complex to be built in Gyeonggi Province, along with SK Hynix. South Korea aims to increase the self-sufficiency ratio of essential materials, parts, and equipment for chip production to 50 percent by 2030.[10][11]
"If we complete the construction of the semiconductor mega cluster at an earlier date, we will achieve the world's leading competitiveness in the chip sector and provide quality jobs for young generations."
"We already possess world-class technological and production capabilities in several areas, such as memory chips and OLED displays. The government must firmly support the private sector's investment for further growth."
Gumi is also the city which accommodate Semiconductor Clusters with Samsung Electronics and small and middle sized enterprises. SK Siltron also invest their factories and R&D centres in Gumi.
Output
[edit]In 2022, semiconductors were South Korea's leading export, totaling $129 billion and making up nearly 19% of the nation's overall exports.[12] The Statistics Korea released statistical data demonstrating that, from February 2023 to February 2024, semiconductor production increased 65.3%, which was the largest increase since the end of 2009.[13] In addition to the semiconductor industry holding prominence within South Korea, the country leads globally in memory chip production, with Samsung Electronics and SK Hynix dominating the market, holding global market share of 73% for Dynamic Random-Access Memory (DRAM) chips and 51% for NAND flash.[14] However, in 2023, South Korea held approximately 13% of the global semiconductor market, reflecting a gradual decline from previous years.[15] Despite limited natural resources and size constraints, South Korea continues to invest heavily in semiconductor manufacturing, with the aim of Samsung and SK Hynix to significantly increase monthly wafer production to 7.1 million by 2030.[12]
Geopolitical Context
[edit]The semiconductor industry in South Korea has become increasingly important in the context of global geopolitical competition, particularly between the United States and China. In recent years, the United States has introduced a range of policy measures aimed at maintaining its technological lead in the semiconductor sector. These include export controls designed to limit China’s access to advanced semiconductor technologies and financial incentives through the CHIPS and Science Act to promote domestic semiconductor production in the United States. South Korea plays a significant role in foundry manufacturing and produces about 37% of the world’s semiconductors smaller than 10 nanometers.[9]
United States - South Korea Semiconductor Cooperation
[edit]Bilateral cooperation between the United States and South Korea has intensified in recent years. In 2021, the two countries agreed to collaborate on semiconductor research and manufacturing. Samsung Electronics committed to a $17 billion investment in a fabrication plant in Texas, and SK Hynix announced a $15 billion investment in an advanced packaging and R&D facility in the United States. Samsung has since considered an additional $200 billion investment for future U.S.-based plants.[9]
At the diplomatic level, both countries participate in the “Fab 4” alliance—an informal grouping of key East Asian semiconductor producers—and have established the U.S.–Korea Supply Chain and Commercial Dialogue, which addresses cooperation on critical technology sectors, including semiconductors.[9]
See also
[edit]
References
[edit]- ^ a b c d e "Semiconductor". Invest Korea.
- ^ "The rise of Korea's semiconductor industry". KBS WORLD. July 10, 2017.
- ^ "The Symbiotic Genesis: Investigating the Intricate Relationship Between South Korea's Development Plans of the 1970s and the Current Semiconductor Industry Policy - The SAIS Review of International Affairs". saisreview.sais.jhu.edu. 2024-11-27. Retrieved 2025-03-02.
- ^ Soh Changrok. September (1997) “From Investment to Innovation? The Korean Political Economy and Changes in Industrial Competitiveness,” International Trade and Business Institute, Korea (ITBI)
- ^ "Ho-Am Byung-chull Lee - HOAM". www.hoamfoundation.org. Retrieved 2025-03-02.
- ^ "History | About us". Samsung Semiconductor Global. Retrieved 2025-03-02.
- ^ Y, Jon. "The Rise and Peak of Japanese Semiconductors". www.asianometry.com. Retrieved 2025-03-02.
- ^ "How DRAM changed the world". www.micron.com. Retrieved 2025-03-02.
- ^ a b c d Stangarone, Troy (April 13, 2023). "The Role of South Korea in the U.S. Semiconductor Supply Chain Strategy". The National Bureau of Asian Research. Retrieved April 2, 2025.
{{cite web}}: CS1 maint: url-status (link) - ^ "South Korea invests big in becoming a global chip leader". DW News. January 24, 2024.
- ^ "(LEAD) S. Korea to set up world's No. 1 semiconductor cluster in Seoul metropolitan area". Yonhap News Agency. March 15, 2023.
- ^ a b Fritz, Martin (2024-01-24). "South Korea invests big in becoming a global chip leader". dw.com. Retrieved 2025-03-06.
- ^ "South Korea's Semiconductor Output Rises by Most in 14 Years". Bloomberg. March 29, 2024.
- ^ "South Korea Semiconductors". www.trade.gov. 2023-09-05. Retrieved 2025-03-06.
- ^ "South Korea: semiconductor global market share 2023 | Statista". Statista. Archived from the original on 2024-12-27. Retrieved 2025-03-06.