South Korea: $470B vision for world's largest chipmaking hub

Private sector investments

Samsung Electronics is set to lead the investment, committing 500 trillion won for the project. This includes a substantial 360 trillion won budget for six new fabs in Yongin, an additional 120 trillion won for three new fabs in Pyeongtaek, and three research fabs in Giheung. SK Hynix plans to allocate 122 trillion won to construct four new factories in Yongin.

President Yoon Suk Yeol anticipates that the semiconductor mega cluster will create at least three million jobs over the next two decades. The government envisions a substantial increase in market share, aiming to capture 10 percent of the global market for non-memory chips by 2030, a significant rise from the current estimate of 3 percent.

Government support and policy measures

To ensure the success of the mega cluster, the government is committed to supporting the supply chain's self-sufficiency by targeting 50 percent self-sufficiency in key materials, parts, and equipment by 2030. A testbed for chip-related materials and equipment suppliers is set to be launched at the Yongin complex by 2027.

President Yoon Suk Yeol emphasized the importance of the semiconductor industry and the expected job creation. He debunked criticism of extending tax credits, stating, "If tax credits lead to greater investment by semiconductor businesses, all businesses in the same ecosystem will greatly increase their profits and jobs, leading to an increase in state tax revenues."

Global competition and economic impact

South Korea's move aligns with global trends as countries like Japan and Taiwan aggressively invest in their chip sectors. The government's commitment to tax breaks for local chip firms underscores its determination to protect a vital sector contributing approximately 16 percent to total exports.

South Korea's plan to build the world's largest semiconductor mega cluster is a significant stride in securing its position in the competitive global chip industry.

With substantial private sector investments, government support, and a focus on self-sufficiency, the project aims to bolster the domestic semiconductor market and contribute significantly to job creation and economic growth, reported South Korean news agency Yonhap.