South Korea's semiconductor industry is considering the creation of KSMC amid claims of facing its biggest crisis ever, prompting calls for KRW300 trillion (US$207 billion) in government financial support.
The severity of this crisis is exemplified by Samsung's current challenges. The tech giant's advanced semiconductor technology development has shown signs of stagnation. The company's recent relaxation of its traditionally strict union prohibition has introduced new operational uncertainties. Additionally, mounting criticism over Samsung's organizational culture has contributed to an accelerating talent exodus. Industry observers are closely watching how Samsung's leadership will address these multiple challenges.
Industry experts have proposed creating the Korea Semiconductor Manufacturing Company (KSMC), modeled after Taiwan's TSMC, to accelerate the development of the semiconductor industry.
The proposal was made by the National Academy of Engineering of Korea (NAEK) during a seminar on December 18, as reported by The Korea Biz Wire and Maekyung.
"Failing to address the warning signs could lead to the decline of Korea's semiconductor industry in the global technology race, leaving irreparable damage to the national economy," said Lee Hyuk-jae, a professor of electrical and computer engineering at Seoul National University.
While South Korea remains one of the world's largest makers of memory, the technology gap between South Korean and Chinese manufacturers has been rapidly narrowing over the past few years. Notably, South Korea is losing its competitive edge in memory chips, as China's DRAM leader ChangXin Memory Technologies (CXMT) has reportedly started to mass produce DDR5 memory and ship it to third-party module makers.
Furthermore, South Korea faces numerous challenges including a weak IC design sector, a lack of growth foundation in the packaging industry, and talent outflow. These indicators point to an upcoming crisis.
To address these challenges, South Korea's government has been urged to provide more support for the semiconductor industry. Industry experts have called for KRW300 trillion in financial support for timely facility investment, along with preemptive technology development in-memory technology and advanced packaging, as well as quick resolution of water and electricity issues in Yongin semiconductor clusters.
Modeled after Taiwan's TSMC, experts stressed the need to build the KSMC to foster the system semiconductor ecosystem. According to The Korea Biz Wire, SK Hynix CEO Kwak Noh-Jung suggested that some of Samsung's mature process technologies could be incorporated into this plan. According to the NAEK, a KRW20 trillion (US$13.9 billion) investment in KSMC could generate economic gains of KRW300 trillion (US$208.7 billion) over the next two decades.
To attract talent, experts have suggested creating a dedicated semiconductor pension plan and removing the 52-hour workweek regulation for semiconductor researchers.
