South Korea aims to enhance competitiveness in the non-memory chip sector

The South Korean Ministry of Trade, Industry, and Energy has announced plans to assist at least ten fabless semiconductor companies in achieving sales of KRW 1 trillion (approximately USD 753 million) by 2035 and support Samsung Electronics in manufacturing artificial intelligence and automotive chips to enhance the nation’s competitiveness in the non-memory chip sector. This sector comprises 60% of the global semiconductor market, yet South Korea only holds a 3% share.

According to Business Korea, the South Korean government plans to establish the world’s largest non-memory chip cluster in Yongin, housing 150 companies and institutions, including fabless firms, materials, components and equipment suppliers, and research centers. Samsung previously announced its intention to invest KRW 300 trillion (US$230 billion) by 2042 to create the world’s largest single, integrated high-tech system semiconductor cluster, which will include five new foundries for contract manufacturing and memory production, and connect existing semiconductor production bases in Hwaseong and Pyeongtaek.

The South Korean government will also expand collaboration between Samsung and domestic fabless semiconductor firms to foster growth in these innovative enterprises. Samsung’s foundry business primarily serves overseas clients such as Qualcomm, while South Korean fabless companies must seek contract manufacturing in mainland China and Taiwan, which can impede production and development.

Under the South Korean government’s plan, approximately KRW 32 trillion will be allocated for R&D support in the semiconductor industry, with 442 billion won (US$340 million) in power chip R&D, 665.3 billion won (US$511.1 million) in automotive chip R&D, and 2.1 trillion won (US$1.6 billion) in AI chip R&D.