Semiconductor Production
Samsung increases investment in chip technology
“Semiconductor Power Center by 2030”: President Moon Jae In (M) visits the Samsung production site in Pyeongtaek. Photo: YNA / dpa
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Worldwide, large chip manufacturers are increasing their investments due to the scarcity of semiconductor modules. Samsung is also gaining ground. Support for other companies also comes from the government.
In view of the global semiconductor shortage, the South Korean electronics giant Samsung wants to significantly increase its billion-dollar investment in chip technology.
By 2030, 171 trillion won (about 125 billion euros) will be invested in the business with modern chip processors and contract manufacturing (foundry), according to the world’s largest manufacturer of memory chips. South Korea’s government announced major tax breaks and loan assistance to support investment by the domestic chip industry.
With the higher expenditures, Samsung Electronics wants to accelerate research in the field of processor technology and the construction of new production facilities. Samsung had originally announced investments of 133 trillion won in April 2019.
The South Koreans have set themselves the goal of extending their market leadership for memory chips, which are used in smartphones, for example, to so-called logic chips by the end of this decade. To this end, Samsung has worked with various semiconductor design companies, parts manufacturers and equipment manufacturers, as well as research institutions over the past two years, it said.
The company also said it was starting construction of a new production line at its manufacturing complex in Pyeongtaek, about 65 kilometers south of Seoul. The plant is scheduled to be completed in the second half of 2022.
Other large chip companies, such as industry leader Intel in the USA and TSMC in Taiwan, also want to significantly expand their capacities with additional billion-dollar investments. The shortage was also triggered by the skyrocketing demand for technology such as laptops in the corona pandemic.
South Korea must consolidate the top position in memory chips and become the number one in system semiconductors, said President Moon Jae In during a visit to the Samsung production site in Pyeongtaek. Only in this way can the country achieve its goal of “becoming a semiconductor power center by 2030”.
According to Moon, South Korean chip companies including Samsung and Sk hynix plan to invest 510 trillion won (about 373 billion euros) or more over the next ten years. “The semiconductor industry has moved beyond competition between companies to an era of competition between countries.”In order to manage the re-organisation of global supply chains, the government will offer support such as tax benefits at the national level.
Among other things, tax reductions of up to 50 percent in research and development and up to 20 percent in fixed capital investments are planned by 2024. More than a trillion won is to be made available for loans at favourable interest rates for property investments.
According to the government’s plans, the “K(orea) semiconductor belt” is to be created in the western part of the country, including Pyeongtaek. This will cover the full scope of the semiconductor business including manufacturing, materials and design.
