[Peace&Chips] 'Design and SoBujang in One Place'... 'Cluster' Becomes Essential Item for Semiconductor Hegemony

US Shows Commitment to Developing Semiconductor Manufacturing Cluster
South Korea Announces Plans for System Semiconductor Cluster
"Must Lead Industry Through Cluster Development"

Editor's NoteSemiconductors, known as the rice of modern industry. Although it's a term we hear every day, it’s often hard to explain. Peace & Chips will make the complex concepts and overall flow of the semiconductor industry easy to digest for you. Just bring your spoon.

"By 2030, we will unveil at least two large-scale clusters equipped with cutting-edge logic (system) semiconductor fabs. Each cluster will foster a supplier ecosystem and include R&D facilities and specialized infrastructure to innovate new process technologies."

This statement was made by Gina Raimondo, U.S. Secretary of Commerce, during a lecture at Georgetown University last month. Secretary Raimondo revealed plans to promote the CHIPS and Science Act (CSA), fully expressing her country’s aspirations. She even expressed the hope that "the U.S. becomes the only country in the world where every company producing advanced semiconductors has substantial R&D and manufacturing facilities."

Gina Raimondo, U.S. Secretary of Commerce
[Photo by Yonhap News]

The United States regards semiconductors as its most powerful weapon to beat China. To seize leadership in the semiconductor industry, it began full-scale efforts last year. In August of that year, the CSA was enacted, providing a total of $52.7 billion in subsidies and tax credits to semiconductor companies investing domestically.

The U.S. plans to establish multiple semiconductor manufacturing clusters through the CSA, recognizing that building strong clusters is the greatest competitive advantage, and has taken proactive steps accordingly.

The dictionary definition of a cluster is 'a group' or 'to form a group.' A semiconductor cluster refers to an industrial ecosystem formed by semiconductor-related companies based in a specific region. Since many companies must be involved to complete a single semiconductor chip, they gather in one place to create synergy.

Yang Hyang-ja, a semiconductor expert and member of the National Assembly, said, "If a country does not have production bases domestically, its dependence on external sources grows like a country without oil," and "Only by properly establishing clusters and gaining hegemony can sovereignty be protected."

Our government plans to establish a system semiconductor cluster in Yongin, Gyeonggi Province. Centered around Samsung Electronics, which aims to expand its foundry (semiconductor contract manufacturing) business, the cluster will attract various fabless (semiconductor design) and materials, parts, and equipment (SoBuJang) companies. This is an effort to break free from being a minor player in system semiconductors.

While Korea leads the memory semiconductor market, its market share in system semiconductors is only 3%. Experts agree that nurturing system semiconductors is essential to gaining the upper hand in the global semiconductor hegemony competition. The system semiconductor market is said to be about three times larger than the memory market, and we hope to see more domestic system companies actively competing on this bigger playing field.

This article is from [Peace & Chips], published weekly by Asia Economy. Click subscribe to receive articles for free.

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