Samsung Electronics, the giant South Korean technology giant, recently announced their plans to invest 300 trillion won (US$230 billion) in building the world’s largest semiconductor manufacturing base near Seoul in the Gyeonggi province. This initiative is expected to be completed by 2042 and will focus on the development of five new semiconductor plants, as well as the bringing together of 150 companies – including component and material producers, and chip design houses. The intent of this project is to further Samsung’s presence in the advanced semiconductor market, hoping to capitalize on the increasing demand for 5G wireless networks, artificial intelligence, and self-driving cars.
President Yoon Suk-yeol has stated that technology has become the “key economic growth engine and security and strategic asset”, deemed to be important for export-dependent economies such as South Korea. The government is hoping to draw in 550 trillion won from corporate investment by 2026, with the other big industries being electric vehicle battery production, robotics, displays and biotechnology.
This ambition may have been sparked by other technology powerhouses with protectionist measures and hefty subsidies further making the local chip manufacturing sectors more attractive to investors. South Korea, however, is fighting an uphill battle against giants like the United States and Japan.
The news of Samsung’s investment comes in wake of the company’s lower earnings forecasts for the three months spanning October to December, caused in part by the weak global economy, and declining prices of chips. Local competitor SK Hynix also recorded an operating loss of 1.7 trillion won for the same period, its first since 2012.
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