Although Samsung Foundry is a major chip contract manufacturer, the South Korean government mulls creating a government-funded contract chipmaker tent

South Korea mulls creating 'KSMC' contract chipmaker to compete with TSMC, requires a $13.9 billion investment

submited by

Style Pass

2024-12-25 02:00:04

Although Samsung Foundry is a major chip contract manufacturer, the South Korean government mulls creating a government-funded contract chipmaker tentatively called Korea Semiconductor Manufacturing Company, KSMC, reports The Korea Biz Wire. Industry experts and academics have proposed the initiative.

The Semiconductor Industry Association's Ahn Ki-hyun called for a long-term government investment. Experts project that an investment of KRW 20 trillion ($13.9 billion) in KSMC could result in economic gains of KRW 300 trillion ($208.7 billion) by 2045. However, the big question is whether $13.9 billion is enough to establish a chipmaker. Another concern about publicly funded corporations like KSMC is whether they could develop advanced manufacturing technologies and land enough orders from clients to be profitable. It turns out that in addition to semiconductor makers, Korea needs more fabless software developers.

The proposal was introduced during a seminar hosted by the National Academy of Engineering of Korea (NAEK). The plan aims to address structural weaknesses in the industry, such as an over-reliance on Samsung's advanced nodes under 10nm amid the lack of mature process technologies. Smaller system semiconductor firms struggle to thrive as Korea lacks manufacturing diversity, as seen in Taiwan, where companies like UMC and PSMC that focus on mature and specialty nodes complement TSMC's advanced process technologies.