The Semiconductor 'Independence War' of Each Country... Pressured by the US, Chased by China

$56 Trillion Semiconductor Investment Since US Biden Administration Launch
China Also Allocates Massive Funds for Next-Generation Semiconductors
EU Countries Form Joint Fund to Support Semiconductors in Europe
Korea Only Handling Investment Cards... "Government Must Unite to Avoid Missing the Golden Time"

[Asia Economy Reporter Su-yeon Woo] As the United States pursues a strategy to reduce semiconductor dependence concentrated in East Asia and strengthen its domestic supply chain, both crisis and opportunity have come to the Korean semiconductor industry. Since the COVID-19 pandemic, global governments feeling the crisis in semiconductor supply have moved to strengthen their domestic supply chains, putting pressure on Korean companies to invest overseas while also facing new national-level competitors.

Experts warn that if Korean semiconductor companies fail to respond swiftly to these changes in the semiconductor supply chain, the status of 'K-semiconductor' could be shaken. There are also calls for unified policies between the government and private companies to maintain competitiveness in the semiconductor industry, which has turned into a national rivalry.

US, EU, and China Compete for Semiconductor Self-Reliance

Recently, as semiconductor supply instability has hit global manufacturing, governments worldwide have begun advocating for 'semiconductor self-reliance.' Among them, the United States is leading the charge. Since the Biden administration took office, it has been betting on increasing domestic semiconductor production capacity through various incentives and direct investments.

Recently, the Biden administration announced a semiconductor industry infrastructure investment plan, pledging to invest $50 billion (approximately 56 trillion KRW) in the semiconductor sector. This policy was announced shortly after Intel, a leading US semiconductor company, revealed plans to re-enter the foundry business and make large-scale facility investments on the 24th of last month.

The US envisions revitalizing manufacturing and creating jobs through support for domestic semiconductor companies, while also checking China by strengthening semiconductor industry cooperation with allied countries. President Biden's invitation to Samsung Electronics to the global semiconductor supply shortage meeting on the 12th is also analyzed as an effort to strengthen the semiconductor alliance with Korea while pressuring investment and production attraction within the US.

Another strong potential competitor, China, is also pouring massive funds into its dream of semiconductor self-reliance. Although China has yet to secure advanced process technology, its government-backed large-scale facility investments represent a potential threat. Additionally, China is making strides by targeting next-generation semiconductor markets such as AI semiconductors, where no clear leader has emerged. ByteDance, the Chinese giant platform company operating TikTok, recently began recruiting AI semiconductor personnel, marking the start of full-scale AI semiconductor development.

According to the China Center for Information Industry Development (CCID), as of 2019, China held the largest share (25.9%) of the global AI semiconductor market. AI semiconductors refer to next-generation semiconductors used for computation to implement AI technology's learning and inference capabilities. Since 2017, China's AI semiconductor market has grown rapidly at an annual rate of 50%, while the Asia region, including Korea, accounted for only 15.6% that year.

Europe, which experienced severe supply shortages in the automotive semiconductor market, recently began supporting semiconductor manufacturing within Europe through joint national funds. In February, the European Union (EU), including Germany, France, Italy, Spain, and the Netherlands, announced a semiconductor support program worth 50 billion euros (approximately 67 trillion KRW). Governments agreed to support about 20-40% of the investment amounts companies make in the semiconductor industry.

Competitors Matching the US’s Bold Bets

Meanwhile, Taiwan, a direct competitor of K-semiconductor, is matching the US’s active semiconductor revival policy with large-scale investments. Although Intel recently declared its re-entry into the foundry business, it also expressed intentions to expand cooperation with external foundries, mentioning TSMC.

In response, TSMC has repeatedly announced an aggressive investment stance in the foundry market. This year alone, it revealed a record facility investment plan of $25-28 billion (approximately 28-31 trillion KRW), and recently promised investments totaling $100 billion (113 trillion KRW) over the next three years. This is interpreted as a strategy to solidify its number one position in the global foundry market and widen the gap with Samsung Electronics amid rising expectations for a semiconductor supercycle.

Also, Micron, ranked third in the DRAM market after Samsung Electronics and SK Hynix, is attempting business diversification by considering the acquisition of Japanese NAND flash company Kioxia. Supported by the US government's active support measures, Micron's confidence has grown, and there are forecasts that it could change the NAND flash market landscape through large-scale M&A.

K-semiconductor Still Only 'Handling' Investment Cards

On the other hand, Samsung Electronics, representing K-semiconductor, has yet to present clear facility investment or M&A plans. The expansion plan for the Austin foundry plant in the US is under review along with other candidate sites such as Arizona and New York, and although there were plans to carry out meaningful M&A this year, no significant news has emerged.

Because of this, while other countries are establishing active investment plans in cooperation with their governments to keep pace with the global semiconductor supercycle and supply shortage resolution, Korea is pointed out as lagging behind. In February, the government announced a 133 trillion KRW system semiconductor development support policy, but there is no direct government support, and limitations of relying on private investment were also mentioned.

Hong Dae-soon, director of the Global Strategy Policy Institute, emphasized, "Recognizing the importance of semiconductors as the catalyst for industry, the government and private sector must move with a strong shared sense of purpose," adding, "From the Blue House to related departments and the private sector, a unified policy must be established, and the golden time of the semiconductor industry transformation at the national level must not be missed."

This content was produced with the assistance of AI translation services.