Former South Korean ministers recently gathered to assess the challenges facing the country's semiconductor industry. They cautioned that while South Korea currently leads globally in the memory sector, the nation could lose its fundamental competitiveness within five years if issues such as technological limitations in the AI era, competition from China, and insufficient power supply are not addressed.
According to reports from ET News and Chosun Ilbo, the Federation of Korean Industries (FKI) held a special seminar featuring former ministers of the Ministry of Trade, Industry and Energy (MOTIE). The group collectively warned that South Korea is facing a "comprehensive crisis" in the semiconductor industry, urging the government to prioritize support for "national strategic industries." They argued that without such action, the country would be unable to respond to potential major crises, likened to a "gray rhino" event.
Yoon-ho Lee, former minister of Knowledge Economy (MKE), emphasized that government support for the semiconductor industry should not be viewed as a "benefit" for large enterprises. He highlighted that countries like the United States, China, and Japan provide substantial subsidies to their semiconductor sectors because this directly relates to national competitiveness. Furthermore, over 90% of modern military technology relies on semiconductors, meaning these subsidies are also crucial for national security.
Former MOTIE minister Yun-mo Sung called for South Korea to offer high-quality support more quickly and broadly than other nations. He stressed the importance of strengthening assistance for integrated circuit (IC) design, materials, components, and equipment industries to solidify the ecosystem of South Korea's semiconductor industry.
In the era of the AI boom, South Korea's industry is grappling with power shortages. Some have suggested that South Korea should address the increasingly severe power supply issue through the construction of new nuclear power plants and accelerate the commercialization of next-generation small modular reactors (SMRs).
Former MOTIE Minister Sang-Jik Yoon stated that by 2030, South Korea will need more than 50% additional power capacity beyond the current generation capacity of 144 gigawatts (GW). He emphasized the need for special legislation to expedite the completion of power transmission network construction.
Another former MOTIE Minister, Chang-Yang Lee, pointed out that energy issues have become serious enough to alter global rankings of industrial powers. He called for the South Korean government to elevate the power supply to a national-level priority.
Jeong-Seong Hwang, a visiting professor at Seoul National University, warned during his keynote speech that due to physical restrictions, DRAM technology may reach its limits within five years. This could somewhat reduce the importance of extreme ultraviolet (EUV) lithography and related technologies, potentially weakening South Korea's DRAM competitiveness. Additionally, China's full support for its memory industry poses significant challenges for South Korea in the future.
Current MOTIE Minister Duk-Geun Ahn addressed recent rumors of "crises" surrounding Samsung Electronics, stating that the government will assist the company through various forms of support. Many competing countries have begun offering corporate subsidies, and Ahn indicated that the government would prioritize the recently announced comprehensive support policy worth KRW26 trillion (approx. US$19.2 billion) before considering additional measures.
Moreover, Ahn stressed that South Korea is monitoring competing nations' movements, as any increase in support would be meaningless if other countries follow suit. If that occurs, discussions will take place with relevant departments to explore alternative forms of support. He emphasized that there should be a consensus between the ruling and opposition parties on core semiconductor industry issues.
Article translated by Jack Wu
