Memory-Centric Korean Semiconductor Industry... "Need to Strengthen Entire Value Chain"

Korea Institute for Industrial Economics and Trade Presents 'Competitiveness Diagnosis and Policy Directions by Value Chain in the Semiconductor Industry'

Comprehensive Results of Last Year's Semiconductor Industry Competitive Advantage Evaluation

[Asia Economy Reporter Kim Pyeonghwa] There has been a call for structural improvement in the domestic semiconductor industry, which is primarily focused on memory. It is explained that a strategy is needed to strengthen the entire semiconductor industry value chain and to foster system (non-memory) semiconductors, where there is a competitive disadvantage.

On the 3rd, the Korea Institute for Industrial Economics and Trade (KIET) released a report titled "Diagnosis of Competitiveness by Semiconductor Industry Value Chain and Policy Directions." The report compares and diagnoses the competitiveness of major countries by semiconductor industry value chain amid the recent intensification of technological disputes between the US and China, which has made the global semiconductor supply chain a key issue.

According to the report, the domestic semiconductor industry holds a high status by ranking second in the global market based on competitiveness in the memory sector. However, it was found to have weak overall competitiveness in the semiconductor industry value chain. This is due to competitive disadvantages in all other sectors, with system (non-memory) semiconductors remaining at the lowest level.

In an expert Delphi survey conducted by KIET, Korea's overall semiconductor competitiveness ranked 5th as of last year. Based on a 100-point scale, Korea scored 71 points, lower than the US (96 points), Taiwan (79 points), Japan (78 points), and China (74 points). The US received the highest score as it holds top competitiveness in both system and memory sectors. Taiwan followed the US with high competitiveness in system semiconductors despite a disadvantage in memory.

To enhance the competitiveness of the domestic semiconductor industry, advice suggests strengthening the entire value chain and implementing differentiated strategies to foster system semiconductors, where there is a competitive disadvantage. The government is exploring ways to strengthen the entire industrial value chain to reestablish itself as a semiconductor powerhouse, but the report emphasizes the need for additional detailed implementation strategies.

The report pointed out that in the memory semiconductor sector, continuous preemptive investment and large-scale research and development (R&D) efforts are necessary to maintain competitive advantages. It also stressed the importance of promoting next-generation memory semiconductor technology development projects and protecting technical talent while preventing overseas outflow.

In the fabless sector, which designs system semiconductors, the report emphasized the need for market expansion strategies such as promoting R&D linked to demand sectors and creating clusters. In the foundry sector (semiconductor contract manufacturing), it explained that growth requires activating exchanges between domestic foundry companies and fabless companies.

Although the localization rate in manufacturing equipment and materials has recently increased, the report emphasized that to advance further, fostering global equipment and materials companies through win-win cooperation among domestic semiconductor companies is necessary.

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