Top 3 Semiconductor Equipment R&D Centers Gather in Korea... Samsung and Hynix Effect

ASML to Jointly Operate R&D Center with Samsung Electronics
Possibility of Establishing Center in Hwaseong... Pyeongtaek and Yongin Also in Focus
AMAT and Lam Research Also Establishing Domestic R&D Centers
Synergy Expected with Samsung Electronics and SK Hynix

Following Applied Materials (AMAT) and Lam Research from the United States, the Netherlands' ASML has also decided to establish its research and development (R&D) base in South Korea, making the 'top 3' semiconductor equipment companies by market share all set up R&D centers in Korea. This decision was made because they judged that the business synergy gained from being in the 'home ground' of major global semiconductor players Samsung Electronics and SK Hynix would be significant.

On the 14th, the semiconductor industry is paying close attention to which region the R&D center jointly operated by Samsung Electronics and ASML will be located in. The two companies signed a memorandum of understanding (MOU) at ASML's headquarters in the Netherlands on the 12th and decided to establish an R&D center in the Seoul metropolitan area for the development of next-generation extreme ultraviolet (EUV) lithography equipment essential for ultra-fine processes.

President Yoon Suk-yeol and King Willem-Alexander of the Netherlands are applauding as Samsung Electronics President Kyung Kye-hyun and ASML CEO Peter Wennink sign a memorandum of understanding (MOU) to establish a next-generation semiconductor manufacturing technology R&D center at ASML headquarters in Veldhoven, Netherlands, on the 12th (local time).
[Image source=Yonhap News]

The industry expects the R&D center to likely be located in Hwaseong, Gyeonggi Province. ASML is currently developing a 'New Campus' in Dongtan 2 City, Hwaseong, which will include its Korean branch's new headquarters, a training center, and a remanufacturing center related to equipment repair, with a target completion in 2025. The fact that Samsung Electronics' semiconductor hub, Hwaseong Campus, is adjacent to the New Campus increases the likelihood of this site being selected. Production lines equipped with ASML EUV equipment are already operating at the Hwaseong Campus.

Other possible locations include Pyeongtaek or Yongin in Gyeonggi Province. ASML has a domestic office in Pyeongtaek, and Samsung Electronics is expanding its advanced foundry (semiconductor contract manufacturing) business through the Pyeongtaek Campus. Yongin is planned to host a large-scale semiconductor cluster where Samsung Electronics' new foundry plant will be established.

With the inclusion of ASML, the second-largest company, South Korea will host R&D centers of all top 3 semiconductor equipment companies. The third-ranked company, Lam Research from the U.S., unveiled a comprehensive R&D facility called the 'Korea Technology Center' with an area of 30,000㎡ in Jigok-dong, Yongin, in April last year. The top-ranked company, AMAT, announced last year its intention to establish an R&D center in Korea and is currently scouting for a site. Once the site selection is finalized, detailed plans for the R&D center establishment are likely to be announced in the first half of next year.

The reason semiconductor equipment companies are establishing R&D centers in Korea is largely due to Samsung Electronics and SK Hynix. Being in Korea, the 'home ground' of these companies, allows for technological development cooperation and synergy effects. The nature of the semiconductor equipment business, which requires various support such as maintenance near customer sites, also encourages related companies to increase domestic investment. The sales proportion in Korea is high for these companies. AMAT's sales share in Korea (18%) ranks third after China (27%) and Taiwan (21%). ASML's sales share in Korea is also 29% (as of last year), second only to Taiwan (38%). In Lam Research's regional sales, Korea ranks second, and when including Korean companies' factories in China, the actual ranking rises to first.

Lee Sang-won, General Manager of Lam Research Korea, recently said at a press briefing, "Korea accounts for 75% of the DRAM market and 55% of the NAND flash market," adding, "Because there are two large customers, we are making large-scale investments." Benink, CEO of ASML, also stated, "Korean customer business is growing rapidly," emphasizing the importance of cooperation with customers.