Semiconductor Production to Expand Nationwide; 30 Trillion Won Investment to Secure Next-Gen Market

The government has put forward maintaining a super-gap in memory and securing future markets as the core strategy of its semiconductor mega-project, based on the judgment that competition for global dominance is intensifying amid the rapid growth of the semiconductor market driven by the spread of artificial intelligence (AI).

The government announced its 3S+1F strategy (Speed, Strategic Hubs, Leadership, and Full-scale Support) today, June 29, to secure semiconductor dominance in the AI era.

The core of this strategy is to expand production capacity to meet the surging demand for AI semiconductors, while extending the production system beyond the Seoul metropolitan area to the entire nation and capturing the next-generation semiconductor market.

The government prioritized speed because the spread of AI is causing an explosive increase in memory demand.

According to market research firm Omdia, the global memory market is projected to grow fourfold in five years, from 200 billion dollars this year to 800 billion dollars by 2030.

Reflected in this outlook is a sense of urgency that if production capacity is not secured in a timely manner, market leadership could be lost, as competing nations such as the United States and China are going all-out to build new fabs and expand their production capacity.

In the first quarter of this year, Samsung Electronics and SK Hynix maintained their positions as the top two players in the global DRAM market with a combined market share of 67.4 percent.

However, third-place Micron of the U.S. is in pursuit with a 22.4 percent share, and China's CXMT is also increasing its presence, raising its market share from 4.7 percent in the previous quarter to 7.6 percent.

In particular, Micron is building new fabs in the U.S., Taiwan, and Singapore, and CXMT is also pushing to operate a new fab in Shanghai.

Furthermore, analysts suggest that Chinese companies are expanding their market dominance by absorbing the supply that Samsung Electronics and SK Hynix cannot fully cover amid the global memory demand surge caused by AI.

As semiconductor competition evolves beyond corporate investment into a national all-out effort, the government plans to accelerate the construction of Samsung Electronics' Pyeongtaek production lines while significantly advancing the schedule for building the Yongin Semiconductor Cluster.

The government has set a goal to double DRAM production capacity within five years by shortening the final fab completion timeline for the Samsung Electronics Yongin National Industrial Complex by 7 years and the SK Hynix General Industrial Complex by 12 years compared to the original plans.

The strategy for Strategic Hubs considers the limitations of a production system centered in the Seoul metropolitan area.

The government determined that as semiconductor fabs are concentrated in the capital region, the capacity to secure electricity, water, and land is increasingly diminishing.

Accordingly, a total of 800 trillion won will be invested to foster the southwestern region as a second semiconductor production hub following the capital area, and 81 trillion won will be invested in the Chungcheong region to build a hub focused on High Bandwidth Memory (HBM) packaging and back-end processes.

The goal is to establish a nationwide production system by creating the southeastern and Daegu-Gyeongbuk regions as innovation hubs for materials, parts, and equipment.

The Leadership strategy is designed to cultivate future growth engines such as next-generation memory, on-device AI, and defense semiconductors, which currently have small market sizes but high growth potential.

The government plans to invest over 30 trillion won over the next 15 years to support research and development (R&D), verification, and manufacturing for next-generation memory, edge AI, and defense semiconductors to secure the future market.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.