01 Jun 2023 -

Samsung’s $230b pledge for Seoul chip hub attracts more companies

South Korea Seoul

Samsung Electronics plans to invest 300 trillion won ($230 billion) over the next 20 years in a new domestic production hub in South Korea, with other manufacturers showing an interest in developing a new chip-supply ecosystem.

Billed as what will become the “world’s largest” chipmaking plant, the plan to build the hub in Pyeongtaek, Seoul metropolitan region, is clearly sending ripples of excitement through the industry. Samsung, the world’s top memory chipmaker, plans to build the so-called ‘gigactory’, a simulation of the so-called ‘gigacities’, with semiconductor fabrication lines, test lines, and assembly lines; advanced clean rooms, a hydrogen fluoride treatment facility, and various engineering centers. It plans to produce chips for mobile devices, data center systems, and automotive applications.

Nikkei Asia reports that executives from semiconductor manufacturing equipment majors like U.S.-based Applied Materials, Dutch-based ASML Holdings, and others have been visiting government offices in Gyeonggi province, which surrounds Seoul, to discuss investment plans, infrastructure development, and tax incentives in the province.

South Korea’s President Moon Jae-in called Samsung’s plans a “win-win” for both the technology industry and regional economies. “The construction of the semiconductor cluster is a window of hope in which the industrial structure that is dependent on semiconductors transforms to expand into value-added businesses for the whole area,” Moon said.

Samsung will shoulder the huge construction costs for the plant by itself, instead of the government allocating funds, which suggests the company’s determination to grow further into the chip business.

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