South Korean tech giant Samsung Electronics has announced plans to invest 300 trillion Korean won ($228 billion) in development of a new semiconductor complex in South Korea.
In an announcement made on 14th March, the South Korean government stated that the new facility will be the world’s largest, indicating a strong push by the country to cement its position as a leading force in high-tech industry.
According to the government, it aims to draw 550 trillion won ($419bn) in private investment by 2026 in areas such as semiconductor chips, displays, electric vehicles and batteries.
The country will harness large-scale private investment plans worth $228bn to create ‘the world’s largest’ new advanced system semiconductor cluster in the town of Namsa in Yongin, a city located just outside Seoul.
This cluster will consist of five high-tech semiconductor manufacturing factories, which are expected to attract up to 150 domestic and foreign sub-manufacturers and fabless companies.
“The megacluster will be the key base of our semiconductor ecosystem,” said the government in a statement.
“[South Korea] has world-class manufacturing capability and technologies in various high-tech industries such as semiconductors, secondary batteries and displays, but support and regulatory conditions have been insufficient,” said the trade ministry.
The world’s biggest manufacturer of memory chips, smartphones and TVs, Samsung has seen its profits fall by nearly 70% over the past few months as Russia’s invasion of Ukraine combined with high inflation rates have significantly slowed demand for consumer electronics products and memory chips.
An ongoing shortage of silicon chips prompted the US government to pass the ‘Chips and Science’ law (CHIPS Act), which aims to make the US more competitive with China by providing $39bn in funding for domestic semiconductor chips manufacturing and research.
Read more:President Biden signs $52bn CHIPS Act into law
The US has also cracked down on its exports of advanced computer chips to China in an effort to cut off supplies of critical technology to the country that may be used across sectors such as advanced computing and weapons manufacture.
Under the new rules, US companies must cease supplying Chinese chipmakers with equipment that can produce relatively advanced chips unless they first obtain a licence.
The Dutch government has also recently imposed restrictions on the country’s ‘most advanced’ microchip technology exports to China to protect national security.
China has previously accused the US of ‘throwing its weight around’ and forming a ‘technological hegemony’ which seeks to deter the scientific and technology progress of other countries’ by wielding monopoly power, suppression measures and technology restrictions in high-tech fields.
According to South Korea’s trade ministry, the US Chips Act may ‘deepen business uncertainties, violate companies’ management and technology rights as well as make the United States less attractive as an investment option’.