South Korea's Mega Chip-making Plan Receives Support from Samsung

Samsung Invests in Mega Chip-making Plan in South Korea

The multinational electronics corporation Samsung has said that it intends to make an investment of around 300 trillion won ($230.8 billion; £189.6 billion) over the next 20 years in the effort of the South Korean government to build a mega semiconductor center in the country.

According to the BBC, this will go toward the construction of five chip facilities that the company plans to develop.

Memory chips, mobile phones, and televisions are all products that Samsung dominates the market for globally.

Samsung Puts Money Behind South Korea’s Mega Chip-making Project

According to the official plan, financial incentives and other forms of support for infrastructure development would be made available to businesses operating in high-tech industries.

The Ministry of Commerce, Industry and Energy of South Korea issued a statement on Wednesday stating that “the mega cluster would be the essential base of our semiconductor ecosystem.”

According to what was stated, the government intended to “jump forward as a leading country in the middle of tough global competition over innovative sectors” by securing approximately 550 trillion won in investment from the private sector.

This development comes at a time when “key companies are ratcheting up efforts to enhance onshore manufacturing in the semiconductor sector,” as Paul Triolo of the global advisory company Albright Stonebridge Group told the BBC. South Korea’s action comes as a result of this trend.

“It wants to emulate Taiwan’s clustering effect to some extent, where the trifecta of science parks… form a huge cluster that has attracted numerous other industries, both upstream and downstream in the supply chain,” he said. “It wants to achieve this by emulating Taiwan’s clustering effect to some degree.”

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The United States and China are engaged in a heated battle over semiconductors, which are the power source for a wide variety of devices, including mobile phones and military gear.

The United States government made the announcement in October that it will demand licenses for companies who ship semiconductors to China using American equipment or software, regardless of where in the globe the chips are manufactured.

The Netherlands announced a week ago that it likewise intended to place limitations on the sale of its “most advanced” microchip technology in order to defend the country’s national security.

At roughly the same time, South Korea’s trade ministry expressed some reservations on the approach the United States takes with semiconductors.

According to the Ministry of Foreign Affairs, the Chips Act “may further increase economic uncertainties, infringe enterprises’ management and technology rights, and make the United States less appealing as an investment alternative.”

In reaction to the export limits established by the United States government, China has frequently referred to the United States as a “tech hegemony.”

Some significant microprocessor companies, such as SK Hynix, call South Korea their home base of operations.

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