Intel to Invest 40 Trillion KRW in New Semiconductor Factory... Foundry Market Investment Ongoing (Comprehensive)

Intel and Brookfield to Build Semiconductor Plant at Ocotillo Campus in Arizona
TMSC and Samsung Electronics Also Announce Large-Scale U.S. Factory Investments
Domestic Semiconductor Industry Focuses on Foundry as Key to Business Diversification
"Long-Term Predictive Investment Crucial for Foundry"

Pet Galsinger Intel Chief Executive Officer (CEO)

[Asia Economy Reporter Kim Pyeonghwa, New York=Special Correspondent Jo Seulgina] Intel, earnest about expanding its foundry (semiconductor contract manufacturing) business, is partnering with a global asset management firm to invest $30 billion (approximately 40.224 trillion KRW) to build a new semiconductor factory in Arizona, USA. Following recent announcements of new semiconductor factories by major foundry players such as TSMC, Samsung Electronics, and SK Hynix, large-scale investment plans are continuing. Since it is necessary to predict future demand long-term and invest timely, and domestic companies like Samsung Electronics face a challenging semiconductor market, diversification of business is needed, leading to ongoing investment news in the foundry market.

Intel Partners with Brookfield to Build Semiconductor Factory: "A New Capital Raising Model for Capital-Intensive Industries"

According to industry sources on the 24th, American comprehensive semiconductor company Intel announced on the 23rd (local time) that it has agreed to a $30 billion partnership with Brookfield Asset Management to build a semiconductor factory in Arizona. Following the memorandum of understanding (MOU) signed by both parties in February, full-scale progress is expected within six months. Brookfield Asset Management is a global asset management firm with approximately $750 billion (about 1,005.6 trillion KRW) in assets under management.

Intel will build two factories at the Ocotillo campus in Chandler, Arizona. Brookfield will invest 49% of the funds, Intel 51%, with Intel holding ownership and operational rights of the new factories. The profits from the new factories will be shared between the two companies.

Intel described its collaboration with Brookfield as the first step of its 'Semiconductor Co-Investment Program (SCIP)' and evaluated it as a new capital raising model for the capital-intensive semiconductor industry. Since large-scale investment is required in the semiconductor industry, the plan is to share this externally to strengthen financial stability and business flexibility. David Zinsner, Intel's Chief Financial Officer (CFO), said, "We expect SCIP to accelerate innovation and help provide the global supply chain the world needs."

Intel's proactive investment plans align with recent announcements. Earlier in January, Intel revealed plans to build a semiconductor factory in Columbus, Ohio, with investments potentially reaching $100 billion (about 134.8 trillion KRW) over the next decade. It has also announced plans for a $100 billion investment in Germany. Intel is continuing large-scale investments as it aims to re-enter the foundry business.

From the left, Kyung Kye-hyun, CEO of Samsung Electronics DS Division, Lee Chang-yang, Minister of Trade, Industry and Energy, and Choi Si-young, Head of Samsung Electronics Foundry Business Division, are posing for a commemorative photo at the "World's First GAA-based 3nm Mass Production Shipment Ceremony" held on the morning of the 25th at Samsung Electronics Hwaseong Campus in Hwaseong, Gyeonggi Province. Photo by Hyunmin Kim kimhyun81@

TSMC, Samsung Electronics, and SK Hynix Investment Plans Also Ongoing

Investments by major foundry players are also continuing. TSMC, the world's number one foundry company based in Taiwan, announced last year that it would invest $100 billion over three years to expand production. For the new factory in Phoenix, Arizona, USA, it is investing $12 billion (about 16.0896 trillion KRW), with completion expected next year. In Japan, it is jointly investing 1 trillion yen (about 9.7994 trillion KRW) with Sony to build a factory in Kumamoto Prefecture, aiming for mass production by the end of 2024.

Samsung Electronics is building a factory in Taylor, Texas, USA, with an investment of $17 billion (about 22.7936 trillion KRW). Vice Chairman Lee Jae-yong of Samsung Electronics has announced plans to invest 20 trillion KRW domestically by 2028 for R&D, including foundry, as part of the semiconductor super-gap process. Recently, plans to establish a semiconductor post-processing (packaging) complex in Cheonan, Chungnam, have also been concretized. Expansion of the Pyeongtaek semiconductor factory is also anticipated.

SK Hynix completed the acquisition of K-Foundry, a domestic foundry company specializing in 8-inch wafers, earlier this month. It purchased 100% of the shares from Magnus Semiconductor LLC for 575.8 billion KRW, aiming to more than double foundry production capacity. Through SK Group Chairman Chey Tae-won, a $15 billion (about 20.112 trillion KRW) investment is planned in the USA.

"Long-Term Predictive Investment is Key for Foundry"... The Core Key for Domestic Companies to Achieve 'Business Diversification'

The reason behind the ongoing large-scale investment plans by foundry operators varies individually, but they share the common goal of securing competitiveness. It is important to respond timely to foundry market demand according to long-term investment plans. A semiconductor industry insider explained, "The foundry business invests based on future market conditions and demand forecasts. If factories are not built just because the current market situation is unfavorable, it takes more than two years to build a factory, and preparations for that time may be missed."

In Intel's case, as it has not regained the same competitiveness in its core CPU business, it aims to reestablish its status as an integrated device manufacturer (IDM) by expanding its foundry business. Intel had expanded its market presence as a leading IDM for 50 years but has recently been struggling due to weakened technological competitiveness. Pat Gelsinger, Intel's Chief Executive Officer (CEO), announced the IDM 2.0 strategy last year in this regard.

Domestic companies like Samsung Electronics and SK Hynix, which have a high proportion of memory semiconductors, are focusing on strengthening the relatively stable foundry business to diversify their businesses amid a forecasted market downturn centered on memory semiconductors. The World Semiconductor Trade Statistics (WSTS) lowered its global semiconductor market growth forecast this year, significantly reducing the growth rate for memory semiconductors from 18.7% to 8.2%.

Samsung Electronics aims to achieve self-sufficiency in the foundry business within three years. There is also a forecast that demand for foundry centered on advanced processes will remain solid. Researcher Lee Joo-wan of POSCO Research Institute said, "(The expansion of foundry by domestic companies) is largely for portfolio diversification," adding, "Basically, the volatility of non-memory or foundry is much lower compared to memory."

According to market research firm TrendForce, as of the first quarter of this year, the global foundry market share is ▲TSMC (53.6%) ▲Samsung Electronics (16.3%) ▲UMC (6.9%) ▲GlobalFoundries (5.9%) in that order.

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