October 24, 2021

South Korea presents billion-dollar plan to expand chip industry

The government of South Korea has presented the K-semiconductor Strategy. A plan that gives substantial tax discounts to the chip industry. Chip companies have committed EUR 373 billion in investments.

South Korea plans to invest 0bn to become chip 'powerhouse' - Nikkei Asia

The K-semiconductor Strategy should result in the so-called K-chip Belt. The government gives that name to a collection of cities that have a K-shape on the map, where the chip industry has to expand. A total of 208 companies will be there, writes The Korea Herald .

South Korea is already the world’s largest producer of memory chips, but is looking to grow in other areas and become a major player in the production of socs. By 2030, South Korea should be a world leader in that field, President Moon Jae said presenting the plans.

To stimulate investment, South Korea offers large tax credits. For example, there will be up to 50 percent tax discount on R&D and up to 16 percent tax discount on investments in facilities. The government will also offer financing and take care of facilities such as water and electricity.

Samsung is investing 125 billion euros

As part of the announcement, chip companies have announced a joint investment of 510 trillion won over the next ten years. Converted to 373 billion euros. Samsung is making the largest investment of 171 trillion won, or 125 billion euros. That amount includes the investment of 133 trillion won announced in 2019 . In fact, it is an extension of that investment.

SK Hynix is ​​also going to expand in South Korea, but that manufacturer does not say how big the investment is. The company does say it will invest in factories where chips are made on 200mm wafers. The industry in South Korea is already largely moving to 300mm wafers, but the smaller wafers, which are believed to be cheaper, should make it easier for local fabless manufacturers to release their chips.

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ASML builds repair center for EUV machines

The Dutch ASML also contributes to the expansion of the chip industry in South Korea. As part of the plans, it was announced that the Veldhoven company will invest 180 million euros in the country over the next five years. ASML is building a repair center for EUV machines , a new office and a training center.