Publication of 'K-Semiconductor Level-Up Plan' Report... Exploring Development Directions Through Comparative Analysis
"Korean Semiconductor Ecosystem is Vulnerable... Policy Efforts Must Focus on Strengthening Manufacturing Base"
Samil PwC announced on the 29th that it has published the report "K-Semiconductor Level-Up Plan," which compares and analyzes the semiconductor industries of Korea and Taiwan. This report was prepared to explore the development direction of the domestic semiconductor industry through a comparative analysis with Taiwan, whose semiconductor industry history is similar to Korea's.
According to the report, both countries have developed their semiconductor industries since starting wafer processing in the 1980s. Korea, a semiconductor powerhouse ranked second in the world with a 19% market share, has a structure focused on memory production, with the strength of efficient production centered on integrated device manufacturers (IDMs) such as Samsung Electronics and SK Hynix.
On the other hand, Korea shows a high external dependence on design, back-end processes, equipment, and materials, resulting in an overall fragile ecosystem and high profit volatility. It is relatively exposed to risks in the event of a global supply chain restructuring.
In the case of Taiwan, it is characterized by nurturing not only foundries but also fabless and back-end processes together. Multiple companies are positioned across all stages of semiconductor production, creating a balanced value chain with relatively low profit cycle volatility. Unlike Korea’s semiconductor industry, which developed under the private sector led by large corporations, Taiwan’s government took the lead in support. Established in 1973, the Industrial Technology Research Institute (ITRI) of Taiwan is the world’s largest government-funded research institute, from which Taiwan’s representative semiconductor companies TSMC and UMC were both spun off.
The report further advised that while leveraging Korea’s strength in the memory semiconductor sector, a strategy to simultaneously develop fabless and outsourced semiconductor assembly and test (OSAT) industries is necessary.
First, to maintain the ultra-gap in memory semiconductors, the report suggested ▲prompt and systematic implementation of semiconductor support policies ▲extensive support for small and medium-sized enterprises in materials, equipment, and packaging ▲support for technology development and attracting foreign investment.
Additionally, to enhance competitiveness in non-memory semiconductor fields, it proposed ▲highlighting the importance of semiconductor design technology alongside the spread of artificial intelligence (AI) ▲nurturing fabless (semiconductor design) demand companies and attracting regional hubs ▲securing specialized personnel by sector ▲fostering semiconductor industry specialized information service industries such as research institutions and consulting firms.
Jung Jae-guk, the Technology, Media & Telecommunications (TMT) Industry Leader (Partner) at Samil PwC who planned this report, stated, “All semiconductor competitors such as the United States, the Netherlands, and Japan continue to innovate to enhance semiconductor industry capabilities through strong government support,” and advised, “The Korean government also needs to focus its policy capabilities on strengthening the domestic semiconductor manufacturing base and ecosystem.”
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