Semiconductor Equipment

Samsung to build $230 billion fab cluster in South Korea

16 March 2023
Samsung will build a mega fab cluster in the capitol of South Korea close to its existing facilities as part of a larger project in the country to expand semiconductor manufacturing. Source:

It isn’t just Europe and the U.S. that are expanding support for regional semiconductor manufacturing as South Korea is launching a national project to build the world’s largest semiconductor base near its capital of Seoul.

As part of the project, Samsung Electronics said it will invest $230 billion over the next 20 years to ramp up semiconductor manufacturing. According to a report from the Associated Press, the fab mega cluster will be established in Gyeonggi Province by 2042 and will be anchored by five new chip plants built by Samsung.

Part of the goal will be to attract 150 other companies to produce materials, components, designing high-tech chips and more, said South Korea’s Ministry of Trade, Industry and Energy.

Samsung said the new plants will be located near domestic factories already built and will produce semiconductor memory chips as well as logic devices. Samsung said it is anticipating an uptick in demand for memory chips due to new technology adoption like 5G wireless networks, artificial intelligence and autonomous vehicles.

Beyond semiconductors, South Korea said the factory mega cluster will promote other industries as well including rechargeable vehicle batteries, electric vehicles, robotics, displays and bio-technology.

Chip investment abounds

The South Korean project is one of many already happening in the world. The U.S. last year signed the CHIPS and Science Act that will infuse America with $52 billion for the construction of new fabs and the development of new R&D.

In just a few months after the CHIPS Act was passed, nearly $200 billion in private investments and more than 200,000 direct and supported jobs were added to the U.S. economy. The total number of direct jobs in the semiconductor industry alone could reach 312,000 by the end of the decade with the industry supporting a total of 2.1 million direct, indirect and inducted jobs in the U.S. economy, the Semiconductor Industry Association (SIA) said.

Since the U.S. pledged to increase domestic chip manufacturing:

Meanwhile, Europe has its own project, called the European Chip Act, which will infuse a similar amount of money into the European region to expand its own manufacturing prowess for semiconductors.

Developments in Europe include:

Enabling resiliency

Both regions are expanding semiconductor manufacturing to make a more resilient supply chain that is not relying solely on Asia as the main source of chips. If the supply chain is spread out among regions, when another COVID-type pandemic, geopolitical event or other unforeseen issue emerges, it will be able to handle the stress easier.

Weaknesses in the supply chain were found when the COVID-19 pandemic broke out and lockdowns caused a semiconductor supply shortage lasting more than two years. The hope is the impact will be lessened with a more regional-based semiconductor supply chain.

Of course, South Korea, Taiwan and China are not just letting this happen unchallenged and are making expansion plans of their own including this new announcement from Samsung.

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