Semiconductors

Samsung to Pump $230 Billion Into ‘World’s Largest Chip Base’

 

South Korean tech giant Samsung Electronics is planning to invest $230 billion to develop what the country’s government called the world’s largest chip-making base.

Samsung will make the around 300 trillion won investment over the next 20 years as South Korea looks to boost its national chip industry.

The investment is part of a 550 trillion won private-sector investment plan unveiled by the South Korean government on Wednesday. Seoul’s strategy aims to expand tax breaks and support to raise the competitiveness of high-tech sectors including those involving chips, displays and batteries.

 

Also on AF: South Korea Warns US Chips Act Could Backfire, Harm Investment

 

“The economic battlefield, which recently began with chips, has expanded… countries are providing large-scale subsidies and tax support,” said President Yoon Suk Yeol on Wednesday.

“[We] must support private investments to ensure further growth… the government must provide location, R&D, manpower, and tax support.”

Samsung’s manufacturing additions will include five chip factories and attract up to 150 materials, parts and equipment makers, fabless chipmakers and semiconductor research-and-development organisations near Seoul, the industry ministry said in a statement.

 

Critical tech in focus

In addition to private-sector investment, the government will budget 25 trillion won or more over five years for R&D in strategic technologies such as artificial intelligence.

It will provide about 360 billion won to develop chip packaging, and about 100 billion won in electricity and water infrastructure this year for industrial complexes.

In January, the government proposed raising the tax deduction rate for facility investments in chips and other strategic technologies from 8% to 15% for large corporations.

Separately, Samsung Electronics, unit Samsung Display, affiliates Samsung SDI and Samsung Electro-Mechanics said they plan to invest 60.1 trillion won in the next 10 years in regions outside the Seoul metropolitan area to develop chip packaging, displays and battery technology.

South Korea is home to the world’s two biggest memory chip makers Samsung Electronics and SK Hynix.

The country is looking to improve supply-chain stability to become a major player in the non-memory chip field, currently dominated by chipmakers such as TSMC and Intel.

Its plans also follow similar steps from other countries to bolster domestic chip industries, including the United States which last month released details of its CHIPS Act, offering billions of dollars in subsidies for chipmakers that invest in the country.

 

  • Reuters, with additional editing by Vishakha Saxena

 

Also read:

Korean Firms Likely to See Cap on Advanced Chips in China: US

South Korea Eyes Huge Incentives for Chip Investments at Home

China Approves Fund Targeting Korean, Local Chipmakers

ASML Plans $181 Million Chip Centre in South Korea – Nikkei

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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