Samsung to Invest $228B in Semiconductor Complex in South Korea

UTC by Steve Muchoki · 3 min read
Samsung to Invest $228B in Semiconductor Complex in South Korea
Photo: Depositphotos

Samsung announced the semiconductor complex will be situated outside the country’s capital Seoul.

Samsung Group, a multinational manufacturing conglomerate, has pledged to invest up to 300 trillion Korean won or about $228 billion in a new semiconductor complex in South Korea. According to the announcement, the semiconductor complex will be the world’s largest as the South Korean government pushes to bolster crucial technologies, including electric vehicles. Reportedly, Samsung intends to invest $228 billion in the next twenty years.

With support from the South Korean government, Samsung intends to have the semiconductor complex outside the country’s capital Seoul. As such, the South Korean government will have increased job opportunities for Seoul residents amid growing competition in the tech industry.

“In selecting the new locations, we’ve taken into consideration the synergy effect that could be seen from existing semiconductor clusters,” Lee Chang-yang, South Korea’s trade, industry and energy minister, said.

Notably, South Korea is competing with other nations, including the United States, in producing quality semiconductor chips. Furthermore, the chip industry was significantly impacted by Covid-19’s supply chain interruptions despite the growing demand.

“President Yoon Suk-yeol said, while a high-tech industry such as semiconductors needs to grow through a mid-to-longer term plan, we must swiftly push ahead with these plans as if it’s a matter of life and death, given the current situation of global competition,” Yoon’s spokesperson Lee Do-woon said in a briefing.

Samsung Sparks Semiconductor Competition

Samsung will be competing with other chip makers both locally and internationally. Among them is SK Hynix Inc (Frankfurt: HY9H-FF), a South Korean-based semiconductor company whose major products include dynamic random access memory (DRAM), NAND flashes, as well as multi-chip packages (MCP). Notably, the semiconductor industry is highly politicized as developed countries including China and the United States intend to have total control of the tech companies.

Moreover, the United States last year introduced rule policies aimed at cutting Chinese companies off from obtaining chips made in the American jurisdictions. Additionally, the Biden administration signed the Chips and Science Act to have semiconductor companies access $52 billion to boost chip production in the country.

As the South Korean government works together with Samsung Group to increase chip production, the United States is likely to step up its investments in the industry.

“As of now, every country is trying to build its own competitive strengths. There is a flood of tax breaks and capital commitments from governments seeking to onshore semiconductor production,” Pranay Kotasthane, chairperson of the high-tech geopolitics program at the Takshashila Institution, noted “The impulse for the competition is stronger than the impulse for cooperation. Incentives might change if the planned incentives don’t work or when the semiconductor industry sees a downward trend in the investment cycle.”

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