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Samsung Electronics said on Wednesday it expects to invest 300 trillion won (US$230 billion) over the next 20 years as part of an ambitious South Korean national project to build the world's largest semiconductor manufacturing base near the capital, Seoul.
The chip-making "mega cluster", which will be established in Gyeonggi province by 2042, will be anchored by five new semiconductor plants built by Samsung. It will aim to attract 150 other companies producing materials and components or designing hi-tech chips, according to South Korea's Ministry of Trade, Industry and Energy.
Samsung's new plants will be located near its existing domestic factories and will produce both memory chips used for storing data and higher-margin logic chips designed to perform a broader range of functions, the company said.
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A giant in the global memory chip business, Samsung is trying to expand its presence in advanced semiconductors, anticipating that demand will soar in coming years with the adoption of new technologies, such as 5G wireless networks, artificial intelligence and self-driving cars.
A bird's-eye view of Samsung Electronics' chip production plant at Pyeongtaek, a city located in the southwestern part of Gyeonggi province in South Korea. Photo: Reuters alt=A bird's-eye view of Samsung Electronics' chip production plant at Pyeongtaek, a city located in the southwestern part of Gyeonggi province in South Korea. Photo: Reuters>
The semiconductor cluster is part of broader government plans announced on Wednesday to promote six key technology industries the country sees as most crucial for its export-dependent economy.
Apart from semiconductors, they include rechargeable batteries, electric vehicles, robotics, displays and biotechnology. The government hopes to draw 550 trillion won in corporate investment on those projects through 2026.
South Korea's plan comes as other technology powerhouses, including the United States, Japan and China, are building up their domestic chip manufacturing, deploying protectionist measures, tax cuts and sizeable subsidies to lure investments.
In a meeting with economic policymakers and business leaders on Wednesday, South Korean President Yoon Suk-yeol described technology industries as the country's "key economic growth engines and security and strategic assets that are also directly linked to job creation and livelihoods".