Dec 25, 2024 14:00:00

South Korea considers establishing 'KSMC,' a contract chipmaker to rival TSMC

It has been learned that South Korean industry and academia have proposed the establishment of the Korea Semiconductor Manufacturing Company (KSMC), modelled on Taiwan's TSMC, to address the challenges facing the domestic semiconductor industry. The aim is to build a balanced ecosystem between foundries and fabless companies through diversified manufacturing processes.

Korea Considers Establishing 'KSMC' to Bolster Semiconductor Ecosystem | Be Korea-savvy

http://koreabizwire.com/korea-considers-establishing-ksmc-to-bolster-semiconductor-ecosystem/301233

South Korea mulls creating 'KSMC' contract chipmaker to compete with TSMC, requires a $13.9 billion investment | Tom's Hardware

https://www.tomshardware.com/tech-industry/semiconductors/south-korea-mulls-creating-ksmc-contract-chipmaker-to-compete-with-tsmc-requires-a-usd13-9-billion-investment

The plan was revealed at a seminar held by the National Academy of Engineering of Korea (NAEK) on December 18, 2024, and aims to grow South Korea's semiconductor market, which lacks manufacturing diversity compared to Taiwan, and maintain a balanced ecosystem like Taiwan's.

Although South Korea is home to Samsung, one of the world's leading semiconductor companies, it is still lagging far behind Taiwan in terms of logic process technology and chip design, and the situation is not improving. Experts at the seminar stressed that urgent action is needed for South Korea to maintain its global leadership in the semiconductor field.

One proposal is for the government to use public funds to establish a company like Taiwan's TSMC. Experts estimate that if the government invests 20 trillion won (US$20 billion) in establishing KSMC, it could generate an economic effect of 300 trillion won (US$300 billion) by 2045. TSMC was originally established at the request of the Taiwanese government, and some believe that the situation could be improved if the government adopted a public-private partnership approach like in Taiwan.

In South Korea, Samsung is a big player, and most small and medium-sized companies are constrained by their reliance on Samsung for advanced nodes below 10nm, while Taiwan relies on TSMC for advanced semiconductors and has companies like UMC and PSMC for legacy or middle-class semiconductors.

Thus, there is a need to build a balanced ecosystem between foundries and fabless companies through a variety of manufacturing processes that include both cutting-edge and legacy technologies, and KSMC is the best way to do that. Professor Kwon Seok-jun of Sungkyunkwan University said, 'If KSMC can be established with the support of the government, it could play a role similar to TSMC in Korea.'

'The 20 trillion won funding may not be enough, and SK Hynix CEO Kwak Noh-jeong has suggested that the company could reuse some of Samsung's legacy semiconductor facilities as part of the plan,' the report said.

At the seminar, seven major issues were raised in the Korean semiconductor industry, including weakening investment competitiveness, lack of growth in fabless and packaging, talent outflow, and excessive regulations, and solutions were proposed, including strengthening the semiconductor ecosystem, expanding

R&D investment, and implementing policies to attract and retain talent. Feedback from TSMC engineers was also given that the fast pace of development often requires extended working hours, and it was suggested that the '52-hour work week' policy set in Korea be relaxed.

Ahn Ki-hyun of the Semiconductor Industry Association stressed the urgency of timely investment and advocated for 300 trillion won in government support through subsidies and tax credits by 2047 to maintain South Korea's semiconductor leadership.