Samsung plans to build several new factories in its native South Korea as part of a multibillion-dollar government initiative to boost the chip industry. The investment volume will be the equivalent of 230 billion dollars (214 billion euros) by 2042, the electronics giant announced. The project is part of a program by which the government in Seoul aims to activate private investment with a volume of almost USD 400 billion.
The economic battle that recently started with chips has broadened, President Yoon Suk Yeol said. “Countries provide extensive subsidies and tax relief.” In January, South Korea nearly doubled its tax deductions on investments in semiconductors and other areas deemed strategically important to 15 percent.
South Korea has now announced almost an additional $18 billion for research and development in areas such as artificial intelligence (AI) for the coming years. Another almost 330 billion dollars must flow to, among other things, the development of new industrial estates. With this, the government wants to expand the range of semiconductors produced in the country. Samsung and competitor SK Hynix are among the world’s largest providers of memory chips.
Samsung wants to build five new chip factories
According to the Ministry of Industry, Samsung will build five new chip factories in the coming years. These would likely attract 150 suppliers to the greater Seoul area. Samsung Display, Samsung SDI and Samsung Electro-Mechanics plan to invest $46 billion in new manufacturing facilities over the next ten years. This amount comes on top of the investments of the parent company Samsung Electronics.
Many countries are currently engaged in a subsidy race for the semiconductor industry. To avoid supply bottlenecks such as during the corona pandemic and not to fall behind technologically, they want to lure factories to their own country.
Computer chips are currently mainly produced in Asia. To that end, the United States launched the $53 billion Chips and Science Act last year. With the “chip law” the EU aims to double its market share in world production by 2030. China even wants to pump 136 billion dollars into this sector.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
