The technological divide between Samsung and TSMC has significantly widened, creating formidable challenges for Samsung in the competitive semiconductor landscape. While TSMC has successfully achieved a remarkable 60% yield in its trial production of cutting-edge 2nm technology, Samsung struggles to advance its 3nm Gate-All-Around (GAA) process. As TSMC continues to capture a larger share of the market with each passing quarter, South Korea is reportedly considering a state-backed competitor, named KSMC, to challenge TSMC’s dominance.
Ambitious Plans to Establish KSMC
The proposal for KSMC, short for Korea Semiconductor Manufacturing Company, aims to strengthen South Korea’s semiconductor sector, with initial funding estimates nearing $14 billion. This strategic initiative emerged during a seminar hosted by the National Academy of Engineering of Korea (NAEK) on December 18. The vision behind KSMC is to foster a robust ecosystem of both foundries and fabless companies, which would significantly contribute to the development of advanced technologies.
Industry analysts project that establishing KSMC could require an investment of approximately 20 trillion Korean won (around $13.9 billion). Despite the high initial costs, the potential returns are promising, with estimates suggesting that the operation could yield an impressive 300 trillion Korean won (about $208.7 billion) in economic benefits by the year 2045. Additionally, KSMC’s formation is expected to support other semiconductor manufacturers focused on mass-producing wafers at more established nodes such as 10nm.
Professor Kwon Seok-jun of Sungkyunkwan University emphasizes that TSMC’s success in maintaining a balanced ecosystem relies heavily on collaborations with foundries like UMC and PSMC, which specialize in older lithography processes while TSMC directs its efforts toward more advanced technology innovations. With government backing, KSMC aims to replicate this ecosystem in South Korea, although questions linger regarding its capability to manage state-of-the-art manufacturing processes under public support.
Ahn Ki-hyun from the Semiconductor Industry Association points out the critical importance of timely government funding. He asserts that subsidies and tax incentives will play a pivotal role in enabling KSMC to elevate South Korea back to the forefront of the semiconductor industry by 2047.
For more insights, you can refer to The Korea Bizwire.
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