On Wednesday, Samsung Electronics announced that it plans to invest $230 billion over the next two decades as part of a massive South Korean national initiative to construct the world’s largest semiconductor production hub close to the capital city, Seoul.
By 2042, this “mega cluster” for chip-making will be established in Gyeonggi Province and will feature five new semiconductor factories constructed by Samsung, along with the goal of attracting 150 additional businesses involved in producing materials and components or designing advanced chips, as per the Ministry of Trade, Industry, and Energy of South Korea.
Samsung has revealed that its new plants will be built in proximity to its existing domestic factories and will manufacture both computer memory chips for data storage and higher-value logic chips, capable of performing a wider range of functions.
As a leader in the global memory industry, Samsung is striving to increase its footprint in advanced chips, expecting a surge in demand in the near future as new technologies like 5G wireless networks, artificial intelligence, and self-driving vehicles gain wider adoption.
As announced on Wednesday, the semiconductor cluster is one of the components of the government’s broader plans to encourage six primary technology industries that the nation considers most essential for its export-oriented economy.
Along with semiconductors, these sectors include rechargeable batteries, electric vehicles, robotics, displays, and biotechnology. The government aims to attract 550 trillion won ($422 million) in business investments for these initiatives until 2026.
South Korea’s strategy emerges as other technology giants, such as the United States, Japan, and China, are increasing their domestic chip production, utilizing protectionist tactics, tax incentives, and substantial subsidies to attract investments.
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