"Golden Time for Semiconductor Investment, Results Decided in 5 Years... Urgent Need to Secure Talent"

TSMC Plans 145 Trillion KRW Investment Over 4 Years
Intel Also Invests 22 Trillion KRW in Facilities This Year

[Asia Economy Reporters Heungsun Kim, Suyeon Woo, Hyunjin Jung] As Samsung Electronics falls behind in the global semiconductor top 3 companies' performance competition, concerns are growing that the 'K-semiconductor crisis theory' could become a reality. Experts also point out that if Samsung misses the appropriate investment timing (golden time), this gap could widen even further.

According to industry sources on the 23rd, Taiwan's TSMC recently announced an increase in its investment plan for this year from the original $28 billion to $30 billion (approximately 33 trillion KRW). The sales growth forecast for this year was also raised from 15% to 20%. Previously, TSMC revealed an aggressive investment plan of $100 billion (about 113 trillion KRW) over the next three years.

This means a plan to pour in more than 145 trillion KRW over the next four years, which is about 10 trillion KRW more than Samsung Electronics' '2030 system semiconductor investment plan' (133 trillion KRW). TSMC is leveraging the recent boom in the foundry market to aggressively expand investments and widen the gap with Samsung.

Another major competitor, Intel, also announced this year a $20 billion (22 trillion KRW) capital expenditure, planning to build two foundry plants in Arizona, USA.

Meanwhile, Samsung has only rumors circulating about expanding its U.S. plant with a $17 billion (20 trillion KRW) scale, additional investments in its domestic Pyeongtaek plant, and large-scale mergers and acquisitions (M&A) of global semiconductor companies, but has yet to release an official stance. Amid the aggressive investment plans and rapid moves of global competitors, concerns are emerging that Samsung alone might miss the 'golden time.'

Samsung Has Yet to Announce Official Investment Plans
Concerns Over Widening Performance Gap Ahead
Experts Say "Semiconductor Shortage Will Persist, Public-Private Cooperation Needed to Secure Talent"

Semiconductor industry experts foresee that the global supply shortage (shortage) situation is likely to continue for some time. They also added concerns that as the U.S. reveals its intention to reorganize semiconductor production and supply chains centered on its own country, domestic companies may find it much more difficult to maintain competitiveness. They emphasize the need for focused investment and efforts to secure talented personnel, especially by expanding investments in leading fields such as memory semiconductors where South Korea is a frontrunner.

Professor Jo Junghwi of the Embedded Systems Engineering Department at Incheon National University said, "The surge in demand for IT devices related to non-face-to-face activities due to COVID-19 triggered the semiconductor shortage," adding, "To meet this demand, expanding foundry (semiconductor contract manufacturing) facilities could be a fundamental solution, but large-scale investments and long construction periods are required, so supply-demand imbalances will persist." Executive Director An Gihyun of the Korea Semiconductor Industry Association also said, "There is an uproar due to immediate shortages, but only now are they starting to pay attention to expanding manufacturing facilities," and forecasted, "Considering that it takes more than three years after groundbreaking, it will take at least five years for the shortage problem to recover."

The foundry sector is structured with Samsung Electronics and TSMC dividing the market. As of the first quarter of this year, TSMC held a 56% global market share, ranking first, and Samsung was second with 18%. Experts commonly agree that since companies with both technological capabilities and investment capacity are limited, Samsung needs to expand its manufacturing facilities. Executive Director An emphasized, "In five years, the results will be determined by who and how the semiconductor industry invested," adding, "Government support such as tax benefits, infrastructure provision, and related legislation must back domestic companies to build more manufacturing facilities in Korea."

On the other hand, there are opinions that Samsung Electronics and SK Hynix should focus on defending the memory semiconductor market they lead. Professor Lee Jongho, director of the Semiconductor Joint Research Center at Seoul National University, said, "We were pioneers in the memory field, but while growth stalled, latecomers rapidly caught up, narrowing the gap in technology and production volume," adding, "We must increase mass production plants, improve price efficiency, and expand yield to overcome competition." He also noted, "There are concerns about lacking system semiconductor capabilities, but the gap with the global market is already significant," and added, "We need to choose and focus on the fields where we can truly excel."

Experts unanimously agreed that for the Korean semiconductor industry to maintain its technological edge over competing countries, it is urgent for the public and private sectors to unite in securing outstanding talent. Despite raising the need for workforce development for several years, support has been minimal, causing key personnel to move overseas and allowing competitors to catch up.

Director Lee emphasized, "Among master's and doctoral-level talents, selecting outstanding individuals and supporting spaces and budgets for practical training is essential to cultivate the workforce needed on-site." Professor Jo argued, "Along with measures to nurture future talent such as expanding enrollment in semiconductor-related departments, experts who can be immediately utilized in practice must be secured," adding, "The government needs to consider attracting domestic scholars who have gone abroad, and if they cannot be recruited, at least industry-academia research and development (R&D) cooperation programs should be established to learn technology and know-how."

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