"Opportunities for Domestic Fabless Companies through Korea-Japan Horizontal Semiconductor Cooperation"

The 2nd Seoul National University System Semiconductor Win-Win Forum
Presentation by Kim Yangpaeng, Senior Researcher at the Korea Institute for Industrial Economics and Trade

"In the semiconductor industry, cooperation between Korea and Japan has so far been vertical. Korea handled manufacturing, while Japan supplied materials and equipment. Recently, as Korea's materials, parts, and equipment (SoBuJang) technology has improved, this should shift to horizontal cooperation."

Kim Yang-peng, a senior researcher at the Korea Institute for Industrial Economics and Trade, said this on the 24th at the '2nd System Semiconductor Win-Win Forum' held at Seoul National University's Global Engineering Education Center. Kim, who presented on the topic of 'Current Status of the Japanese Semiconductor Industry,' expressed that there is great potential for semiconductor supply chain cooperation between Korea and Japan, explaining, "Japan's movement to revive semiconductor manufacturing can present ample opportunities for domestic fabless companies."

Kim Yang-peng, Senior Researcher at the Korea Institute for Industrial Economics and Trade, presenting at the "2nd System Semiconductor Win-Win Forum" held at the Seoul National University Global Engineering Education Center on the 24th / Photo by Kim Pyeong-hwa

Kim stated that Japan's semiconductor history began in the 1950s and has continued to the present. He explained that in the early 1950s, after the transistor was developed in the United States, Japan quickly followed suit and developed transistor radios, thereby growing its electronics industry. Subsequently, unlike the U.S. semiconductor industry which was focused on military applications, Japan's semiconductor industry developed centered on home appliances, gaining competitiveness in miniaturization and pricing.

Entering the 1990s, due to factors such as U.S. containment, management difficulties in local electronics companies, and a chicken game triggered by Taiwan, the Japanese semiconductor industry faced a decline. However, Kim explained that this decline was limited to the semiconductor manufacturing sector, while the materials and equipment sectors have maintained and enhanced their competitiveness from the early days of semiconductor history to the present.

Recently, as semiconductor hegemony competition has intensified among major countries, Japan is also striving to rebuild its semiconductor industry. The Japanese government has re-designated semiconductors as a national strategic industry, and with geopolitical changes prompting the U.S. to shift towards cooperative approaches, discussions are underway locally about producing 1.5-nanometer semiconductors. With companies like Japan's Rapidus and Taiwan's TSMC operating manufacturing plants in Japan, local semiconductor production is expected to surge after this year.

Kim sees that while Korea and Japan can compete in the semiconductor field, there are many areas for cooperation. In particular, "cooperation between fabless companies of the two countries is the most promising area for horizontal cooperation in the semiconductor industry," he explained. He added, "The fabless market shares of Korea and Japan are low, with Japan's being even lower. If they combine their strengths and enter overseas markets together, there will be many opportunities for cooperation."

He also suggested, "The main players in global semiconductor hegemony competition are the U.S., Europe, and China?three large blocks?and considering population and economic scale, it is difficult for Korea or Japan to compete individually due to the scale difference. To achieve economies of scale, Korea-Japan cooperation is necessary." He explained that Korea and Japan need to cooperate in the supply chain without relying on cooperation or fundamental technologies from the U.S. or Europe.

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