In South Korea, they are thinking about creating KSMC – a competitor to TSMC with state support

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The proposal was presented at a workshop organized by the National Academy of Engineering of Korea (NAEK). The academy believes that the creation of KSMC with government support will allow South Korea to replicate the success of Taiwan’s semiconductor ecosystem. This ecosystem allows not only TSMC, but also more than 250 small semiconductor technology and software companies without their own manufacturing facilities to successfully operate in Hsinchu Science Park. However, to achieve this result, it is necessary to provide small firms in the industry with the resources to grow alongside giants such as Samsung and SK hynix.

Experts estimate that an investment of 20 trillion Korean won ($13.9 billion) in KSMC could generate economic growth of 300 trillion Korean won ($208.7 billion) by 2045. However, there are doubts that this amount will be enough to create a large chip manufacturer, and whether the enterprise will be able to develop advanced manufacturing technologies and attract enough orders to ensure profitability. In addition, it turns out that South Korea needs more chip designers without its own production facilities.

South Korea is the world’s largest memory manufacturer, but lags far behind Taiwan in logic process technology and chip design. According to the NAEK report, the main problems of the South Korean semiconductor industry include a widening technological gap with international competitors, insufficient investment attractiveness, weak growth of companies without their own production facilities, a shortage of talent and excessive regulation limiting the development of the industry. Structural deficiencies also need to be addressed, such as over-reliance on Samsung’s advanced sub-10nm nodes coupled with a lack of mature process technology. South Korea should learn from Taiwan, where companies such as United Microelectronics Corporation (UMC) and Powerchip Semiconductor Manufacturing Corporation (PSMC) are focusing on producing mature and customized components to complement TSMC’s advanced manufacturing processes.

Experts emphasize the need to urgently resolve existing problems to ensure South Korea’s global leadership in the field of semiconductors.