Industrial Research Institute "Semiconductor Supply Chain Restructuring... Need to Consider Participation in US-led Semiconductor Alliance"

[Asia Economy Reporter Park Sun-mi] As the global semiconductor supply chain is expected to be reorganized around 2025, it has been suggested that South Korea should positively consider participating in the semiconductor alliance led by the United States in order to leap forward as a comprehensive semiconductor powerhouse.

On the 1st, the Korea Institute for Industrial Economics and Trade (KIET) stated in its report titled 'Global Semiconductor Supply Chain Reorganization Trends and Policy Implications' that the reorganization of the global semiconductor supply chain is accelerating and it is expected that the supply chain could be reorganized around 2025.

So far, South Korea has had an irreplaceable strength in the memory semiconductor sector, allowing it to maintain an ambiguous neutral stance between the US and China while developing its semiconductor industry. However, it expressed concerns that maintaining neutrality may become difficult once the semiconductor supply chain is reorganized in the future.

It advised that in order for South Korea to establish itself as a central country in the reorganized global semiconductor supply chain, it is necessary to positively consider participating in the semiconductor alliance promoted by the United States. Of course, it acknowledged that participation in the US-led 'semiconductor alliance' could temporarily halt exports to China, which accounts for 60% of semiconductor exports, but emphasized that this would be a temporary occurrence and alternative demand could be found in other countries.

Furthermore, the report reminded that major countries including the US are focusing their support policies on semiconductor manufacturing, and mentioned that South Korea needs differentiated strategies to maintain its semiconductor competitiveness. Specifically, it argued that the government should consider financial or tax support at a level that does not fall behind competing countries.

In particular, it emphasized the need to expand domestic semiconductor manufacturing capabilities based on the 'Special Measures Act on Strengthening and Fostering National Advanced Strategic Industry Competitiveness,' which will be implemented from July, and to strengthen strategies for securing core next-generation semiconductor technologies including system semiconductors. It also suggested that infrastructure expansion should be pursued in parallel to enable leading overseas companies to invest in the domestic semiconductor industry and strengthen the semiconductor ecosystem.

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