TLDRs;
- Korea intensifies semiconductor ambitions with broad investments beyond memory dominance.
- Government launches multi-year programs to strengthen AI chip capabilities and local supply chains.
- Regional hubs and incentives aim to decentralize chip production across the country.
- Cooperative foundry and test-bed initiatives expected to support fabless firms and foreign partners.
South Korea is taking another major step to defend and expand its role in the global semiconductor landscape, with President Lee Jae Myung announcing a wide-reaching plan to accelerate chip innovation, support next-generation technologies, and reduce reliance on foreign suppliers.
Speaking at a high-level industry gathering in Seoul on December 10, Lee emphasized that the country must look far beyond its traditional stronghold in memory chips and build a comprehensive semiconductor ecosystem capable of powering the coming era of AI-centric computing.
Lee noted that while Korea continues to dominate global memory chip market share, the nation remains dependent on U.S. equipment and Japanese materials, an imbalance he said needs urgent correction. Strengthening Korea’s domestic supply chain, from materials to advanced packaging, is now a national priority.
Pushing Growth Beyond Seoul
A central theme of Lee’s address was the need to diversify industrial investment outside the Seoul metropolitan area. He encouraged chipmakers and suppliers to consider new regions for expansion, pointing to a developing portfolio of tax incentives, regulatory easing, and infrastructure commitments meant to support companies willing to build or scale operations elsewhere in the country.
Lee highlighted the potential of Korea’s southern regions, where abundant renewable energy is creating ideal conditions for next-generation industrial clusters. These areas, he argued, could play an essential role in ensuring both resilience and regional balance in the semiconductor supply chain.
Heavy Investment in AI and Advanced Technology
Industry Minister Kim Jung-kwan laid out the financial architecture behind the administration’s semiconductor initiative, explaining that 215.9 billion won will be invested through 2032 to support technologies critical to the rising demand for AI processing. The funding is aimed at accelerating innovation in neural processing units and processing-in-memory designs, two areas expected to improve the efficiency of AI inference, alongside continued development of high-bandwidth memory, a core component for training increasingly complex AI models.
Kim’s remarks also clarified that this allocation represents only one part of a significantly larger national roadmap. Korea is advancing a sweeping, long-term program worth 700 trillion won that targets the construction of 10 new fabs by 2047, a move intended to anchor the country as a global semiconductor powerhouse.
Surrounding this mega-project is a series of targeted budgets, 1.27 trillion won over the next five years dedicated to AI-optimized chips, 260.1 billion won by 2031 for compound semiconductors built on materials beyond traditional silicon, and 360.6 billion won by 2031 for advanced packaging technologies that will connect multiple chip components more efficiently and with dramatically improved performance.
New Hubs and Cooperative Foundry Plans
A key structural pillar of the plan is the creation of specialized regional hubs, Gwangju for advanced packaging, Busan for power semiconductors, and Gumi for semiconductor materials and components. These clusters are expected to serve as on-ramps for both local companies and foreign suppliers seeking footholds in Korea’s expanding semiconductor network.
The government is also establishing a cooperative foundry that will reserve manufacturing capacity for fabless companies producing mid-tier chips such as automotive microcontrollers and power management ICs. This model is intended to foster co-development with overseas equipment and materials suppliers, creating opportunities for global partners to integrate with Korea’s supply chain.
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