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Samsung Electronics and SK Hynix will invest $471 billion to build 16 chip factories by 2047

Jessie January 17, 2024

South Korea plans to build the world's largest semiconductor industrial cluster near Seoul, which will be led by Samsung Electronics and SK Hynix, and is expected to invest a total of 622 trillion won to build 16 chip factories by 2047, according to a statement from the Ministry of Industry.

It is reported that the area near Seoul, South Korea currently has 21 manufacturing plants. From the perspective of its future planning, the South Korean government plans to establish a fabless industry exclusive zone in Pangyo; To build fabs and memory chip production facilities in Hwaseong, Yongin, Icheon, and Pyeongtaek; Building industrial parks for materials, parts and equipment in Ancheng; Construction of research and development facilities in Giheung and Suwon.

Of the total, Samsung Electronics will invest a total of 500 trillion won, including 360 trillion won in Yongin chip plant, 120 trillion won in Pyeongtaek system and chip plant, and 20 trillion won in Giheung memory research and development plant.

SK Hynix will invest 122 trillion won to build four memory chip plants in Yongin.

According to the plan, the cluster will produce HBM, PIM and other cutting-edge chips, by 2027 will be built three wafer manufacturing plants and two research and development plants, the goal of 2030 can produce 7.7 million wafers per month, covers an area of 21.02 million square meters, will be the world's largest semiconductor cluster.

South Korean President Yoon Seok-yoon promised to extend tax incentives for chip investment that were due to end this year, and also pledged to support infrastructure, including power and water.

Semiconductor as a global industrial chain, according to the principle of comparative advantage, different countries and regions have different advantages in many semiconductor segments, and are highly concentrated in a few monopolies. Under the conditions of the impact of the new coronavirus outbreak and the intensification of geopolitics, the existing industrial pattern has begun to loosen.

In recent years, countries have strengthened local industrial manufacturing by introducing chip policies to strengthen subsidies and other measures.

The United States, for its part, took the lead in issuing the Chip and Science Act to attract investment from major manufacturers in various countries. According to the Semiconductor Industry Association (SIA), from May 2020 to December 2023, there are 70 projects announced as a result of the Chip and Science Act, with 23 new chip plants and nine expansions. Among them, the single largest investment is Taiwan Semiconductor Manufacturing company (TSMC) announced a $40 billion investment in two new chip plants in Arizona. Texas Instruments plans to spend $30 billion to build four new chip plants in Texas, $6 billion to expand existing sites, and $11 billion to build a new plant in Utah. Intel plans to spend $20 billion each to build two new chip plants in Arizona and Ohio, and expand existing chip capacity in New Mexico and Oregon.

In Germany, on June 30, 2023, foreign media news showed that chip giant Intel and the German government signed an agreement that will spend more than 30 billion euros to build a large chip manufacturing base in the eastern German city of Magdeburg. A third of the money is subsidized by the German government. In addition, Intel will also build a semiconductor assembly and closed test plant in Poland, Intel has established a chip plant in Ireland has begun to use, and is in talks with Italy to build two chip plants. In addition, TSMC is also preparing to set up a chip factory in Dresden, Germany, and Infineon, Bosch, and NXP will jointly participate.

In addition, there are 22 fabs under construction (15 12-inch plants and 8 8-inch plants). In the future, manufacturers including SMIC, Jinghecheng, and Shilanwei also plan to build 10 fabs (9 12-inch factories and 1 8-inch fabs). Overall, Mainland expects to build 32 large fabs by the end of 2024, all focused on mature processes.

In Japan, Rapidus, an advanced semiconductor company supported by the Japanese government, said in April 2023 that it would build more than two chip factories in Chitose, a manufacturing center on the island of Hokkaido. TSMC is also building a new chip production site in Kumamoto, Japan, with about US $3.2 billion in subsidies from the Japanese government, which will start production by the end of 2024......

This is both an opportunity and a challenge, some industry people said that for the local industry, it is necessary to seize domestic resources to tilt the tide; However, in terms of the global pattern, a new round of uneven distribution of regional resources and the problem of disjointed regional development have once again come to the fore.

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