Samsung to Invest Billions of Dollars in South Korea’s ‘Mega Plan’ for Chip Production

Samsung has announced plans to invest approximately $230.8 billion over 20 years in the South Korean government’s attempt to develop a ‘mega hub’ for semiconductors in the country. This will focus on building five chip factories, the company told the BBC.

It is worth noting that Samsung is the world’s largest producer of memory chips, smartphones, and televisions. According to the official plan, companies in high-tech industries will be offered incentives such as expanded tax breaks and infrastructure support.

– The mega cluster will be a key base for our semiconductor ecosystem – stated South Korea’s Ministry of Trade, Industry and Energy on Wednesday.

The ministry added that it also plans to secure around 550 trillion won for investments in the private sector and ‘move forward as a leading country amid fierce global competition in advanced industries’.

The move by South Korea comes at a time when ‘major players are ramping up efforts to strengthen domestic production in the semiconductor sector,’ said Paul Triolo from the global consulting firm Albright Stonebridge Group to the BBC.

Semiconductors, which today power everything from mobile phones to military equipment, are at the center of sharp relations between the U.S. and China. In October, Washington announced it would require licenses for companies exporting chips to China using U.S. tools or software, regardless of where they are produced.

Last week, the Netherlands also stated it plans to impose restrictions on the export of its ‘most advanced’ microchip technology to protect national security. Around the same time, the South Korean Ministry of Trade expressed concerns about U.S. semiconductor policies.

The ministry stated that the Chips Act ‘could deepen business uncertainties, violate management rights and technological rights of companies, and make the United States less attractive as an investment option’.

China has often referred to the U.S. as a ‘technological hegemon’ in response to the export controls imposed by Washington.

South Korea is home to other major microprocessor manufacturers such as SK Hynix.