South Korea is embarking on ambitious plans to bolster its semiconductor industry, aiming to compete more effectively on the global stage and replicate Taiwan’s remarkable success with TSMC.
Recent statements from Ahn Ki-hyun, the representative of the Semiconductor Industry Association, indicate pressing concerns about the future of this key economic sector. "The government must commit to long-term investments to spur growth in the semiconductor industry," he emphasized, underlining the need for stability and foresight within the sector.
At stake is the potential to establish KSMC—a new chip manufacturing company intended to rival TSMC, Taiwan's semiconductor powerhouse. Industry experts estimate investing about $13.9 billion to develop KSMC could generate economic benefits exceeding $208.7 billion by 2045.
Despite these optimistic projections, significant challenges remain. The foremost question revolves around whether this substantial investment will be sufficient to construct and operate a modern chip manufacturing facility. Compounding this uncertainty is concern over whether KSMC can develop advanced technologies and attract sufficient orders to achieve sustainable profitability.
Even as South Korea celebrates its top ranking worldwide for memory chip production, it grapples with acknowledged deficiencies particularly in logic technology and chip design. These shortcomings have left it trailing behind Taiwan, exacerbated by growing competition and rapid advancements from international rivals.
During the past years, pressures to reform have mounted. Reports reveal the semiconductor industry is struggling with technology gaps, dwindling appeal to investors, and weakened growth prospects for smaller firms. Ahn Ki-hyun and others have called for active measures to confront these issues head-on.
The National Academy of Engineering of Korea (NAEK) has urged the government to increase investments dedicated to research and development (R&D) and introduce financial incentives like grants and tax credits to stimulate growth. Alongside these recommendations, NAEK advocates for easing regulatory barriers—especially concerning working hours—to create a more conducive environment for innovation.
Historical precedents from Taiwan demonstrate how strategic governmental support can lead to sustained industrial success. Morris Chang’s founding of TSMC was not merely his endeavor; it represented Taiwan's foresighted recognition of the semiconductor industry as pivotal to national economic prosperity.
Looking to Taiwan’s successful model, South Korea aims to create its own