“Our government will unite with companies to form a semiconductor powerhouse,” said President Moon Jae-in of South Korea. “We will support companies concretely." Credit: Handout.

South Korea aims to be “a semiconductor powerhouse” and is planning to spend US$450 billion through 2030 to achieve global chip dominance.

Samsung and SK Hynix are two of the major beneficiaries of the new bill, but there are 153 companies named in total, ExtremeTech.com reported, citing Bloomberg sources.

These companies are expected to drive the semiconductor industry forward, securing South Korea’s relevance in the global market.

South Korea builds more memory than any other nation on Earth, but not much logic (CPUs, GPUs, other types of microprocessors), the report said.

Taiwan holds the largest share of the logic market by far thanks to TSMC, while companies like Intel and Micron account for large shares of the US’ manufacturing capacity.

“Our government will unite with companies to form a semiconductor powerhouse,” said President Moon Jae-in of South Korea. “We will support companies concretely.

“Major global competitors are pressing ahead with massive investment to be the first to take the future market,” he added.

“Our companies have been taking risks and innovating as well and have completed preparations for tumultuous times.”

In the future, manufacturers will also be able to deduct more of their R&D expenses from their taxes, freeing up additional funds for investment, the report said.

Samsung has announced it’s increasing its foundry investments by 38 trillion won, or US$33.7 billion through 2030, with the funds being split between ongoing process technology research and building new foundries.

The company also said it has broken ground on a new manufacturing line in Pyeongtaek.

The facility will have 2.1 million square feet of floor space and be capable of manufacturing both 14nm DRAM and 5nm logic with EUV, the report said.

Samsung had originally announced a plan to invest US$117 billion by 2030, so this represents a considerable increase over the company’s original plan.

“The entire semiconductor industry is facing a watershed moment and now is the time to chart out a plan for long-term strategy and investment,” Kim Ki-nam, Samsung vice chairman and head of the Device Solutions Division, said.

“For the memory business, where Samsung has maintained its undisputed leadership position, the company will continue to make preemptive investments to lead the industry.”

SK Hynix already had plans to build four new plants in Yongin at an estimated cost of US$106 billion, but the company announced that it would pour an additional US$97 billion into capacity expansions at existing facilities, the report said.

The South Korean government has pledged to incentivize semiconductor manufacturing with lower tax rates, better infrastructure, and a secure water supply. Chip manufacturing, particularly EUV manufacturing, is water-intensive.

Semiconductor research is increasingly viewed as a matter of national security, and multi-national organizations like the EU have expressed greater interest in rejoining the leading edge.

Many countries are working to bolster local chip supply chains as the severe shortage affects production in industries such as autos, and in March US President Joe Biden flagged plans to invest US$50 billion in semiconductor manufacturing and research.

Sources: Bloomberg, ExtremeTech.com, Slashdot.org, Automotive News