"Big Tech Fabless Entry Is Not a Crisis... Strategic Collaboration Needed Through M&A"

Seoul National University System Semiconductor Industry Promotion Center to Host 'Win-Win Forum' on the 16th
Discussion on 'Paradigm Shift and Response Strategies in the Fabless Industry'
Announcement of Achievements from the Ministry of SMEs and Startups' System Semiconductor Innovation Startup Package Project

The SNU System Semiconductor Industry Promotion Center held a win-win forum on the 16th at COEX in Gangnam-gu, Seoul, focusing on the paradigm shift in the fabless industry and response strategies.
Photo by Kwak Minjae

[Asia Economy Reporter Kwak Minjae] As big tech companies like Apple and Tesla enter the fabless industry, voices have emerged saying that this will act as coexistence rather than a crisis for domestic fabless companies. There is also an opinion that domestic system semiconductor companies need to find breakthroughs through M&A and strategic collaboration to compete with global big tech companies.

On the 16th, a coexistence forum titled "Paradigm Shift and Response Strategies in the Fabless Industry" was held at COEX in Seoul, hosted by the Seoul National University System Semiconductor Industry Promotion Center. Attendees included Lee Hyukjae, head of the Seoul National University System Semiconductor Industry Promotion Center; Professor Choi Kichang of Seoul National University; Lee Gyubok, vice president of the Korea Electronics Technology Institute (KETI); and representatives from system semiconductor companies such as Pado, SemiFive, OpenEdge Technology, Nextchip, and DeepX.

Lee Hyukjae, who gave the keynote speech, stated that the system semiconductor industry environment is rapidly changing as big tech companies like Tesla directly create dedicated chips and perform new fabless roles. Professor Lee said, "Moore's Law, which states that the integration density of semiconductor chips doubles every two years, is ending, and due to the diminishing returns of integration density improvements, we are facing a technological inflection point, with development costs increasing sharply."

The companies participating in the forum predicted that big tech companies' entry into the fabless sector would act as an opportunity for coexistence rather than market encroachment. Kim Jungwook, vice president of DeepX, said, "The system semiconductor edge market for small-volume, multi-product production reaches 52 trillion won. Given the characteristics of edge semiconductors, it is impossible to respond with a single solution, so as the market segments, we expect opportunities to open up for domestic fabless companies as well."

The System Semiconductor Industry Promotion Center at Seoul National University, an executing agency of the Ministry of SMEs and Startups' System Semiconductor Innovation Startup Package project, held a performance report meeting on the 16th at COEX in Gangnam-gu, Seoul.
[Photo by Kwak Minjae]

Kim Jonggi, director of SemiFive, proposed mergers and acquisitions (M&A) as a solution amid the rapidly changing system semiconductor industry environment. Commercializing system semiconductors requires long-term efforts such as securing investment funds, product verification, and searching for demand sources repeatedly, so M&A, which can secure capabilities at once, can be an effective alternative.

Kim Kyungsoo, CEO of Nextchip, emphasized the need for strategic collaboration since system semiconductors are a kind of comprehensive art. Kim said, "While attention is focused on design in system semiconductors, there are many factors to consider such as data, labeling, and marketing. Since no single company can excel at everything, we must create breakthroughs through strategic collaboration based on each company's specialized technologies."

Since the system semiconductor market is still in its early stages, the need for successful model collaboration cases was also raised. Kim Jungwook, vice president of DeepX, said, "Early fabless companies like those in edge semiconductors have difficulty finding appropriate demand even if they have solid technology, and demanders find it hard to identify suppliers that meet their needs, resulting in a mismatch. Therefore, creating many successful model collaboration cases is very important."

Meanwhile, at COEX on the same day, a performance report meeting for the Ministry of SMEs and Startups' System Semiconductor Innovation Startup Package project was held. The Seoul National University System Semiconductor Industry Promotion Center, the project executing organization, announced that through financial, manpower, and demand linkage support for 50 system semiconductor companies, they achieved a doubling of sales and a 13-fold increase in investment attraction.

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