South Korea plans to provide KRW500 billion (US$344.3 million) in state funding for a large-scale research and development project aimed at localizing next-generation power semiconductors, ETNews reported.
The project is intended to reduce the country's heavy dependence on imported power semiconductors, with domestic demand currently 90–95% reliant on imports. Total investment could reach as much as KRW750 billion when private-sector matching funds are included.
Breaking the silicon mold
Next-generation power semiconductors use compound materials such as silicon carbide (SiC) and gallium nitride (GaN), which outperform conventional silicon-based chips in high-temperature, high-voltage, and high-frequency environments.
The components are used in defense, electric vehicles, and power grids, making them strategically important to national industries. South Korea's domestic industry, however, lacks sufficient production and supply capacity, leaving the country heavily dependent on imports.
The government is expected to begin surveying demand companies next month as part of implementing its next-generation power semiconductor industry roadmap. ETNews reported that the government sees 2026 as a critical window for shifting the sector toward 8-inch mass production.
Racing toward 8-inch and 1.2kV
The government has set a timeline that starts with infrastructure preparation in 2026, followed by mass production of key devices such as 1.2kV-class SiC metal-oxide-semiconductor field-effect transistors, or MOSFETs, in 2027.
By 2030, South Korea aims to double its technology self-sufficiency rate and domestic production share in power semiconductors from current levels.
The government also plans to complete the foundation for an 8-inch public fab and accelerate technology transfer to private foundries. Power semiconductor wafers are currently largely based on 6-inch production, while 8-inch mass production is expected to increase output and lower unit costs.
Demand-driven, not supply-pushed
The project marks a shift from the existing supplier-led R&D structure, centered on semiconductor manufacturers, toward a model led by companies that actually use the products.
ETNews noted that the structure partly benchmarks the K-On-Device AI semiconductor technology development program, which links demand companies, fabless chip designers, and foundries in consortia. The model is intended to reduce the risk that technologies developed through R&D fail to gain traction in industrial applications.
Anchor companies representing each demand sector would oversee research. Based on identified demand, companies across the materials, devices, modules, and systems value chain would be grouped into teams, with anchor companies serving as lead institutions for their respective projects.
The structure would go beyond technology development and cover the full process from materials to system-level verification, with anchor companies responsible for final commercialization.
Demand areas include energy grids, AI infrastructure, e-mobility, eco-friendly ships, defense, and aerospace. Samsung Electronics, Hyundai Mobis, and Korea Electric Power Corp. are being discussed as possible anchor companies.
If multiple candidates emerge, selection will consider their ability to form and lead full-cycle consortia, their responsibility for commercialization and purchasing intent, and their global competitiveness and economic impact.
The Ministry of Trade, Industry, and Resources is operating subcommittees under a next-generation power semiconductor task force, bringing together key companies, participating firms, and experts from related institutions across materials, devices, modules, integrated circuits, and verification systems.
Busan builds the backbone
The broader push is already being reflected in regional infrastructure projects. Yonhap reported that Busan announced on May 4 that two projects under a Ministry of Trade, Industry and Resources program had been selected, securing KRW20 billion in state funding.
The selected projects are Busan Techno Park's extreme and polar industrial compound semiconductor manufacturing infrastructure project and Pusan National University's industry-academic cooperation foundation project to build an analysis base for high-efficiency SiC power semiconductor substrates.
Busan said the simultaneous selection recognized the competitiveness of the city, South Korea's only designated power semiconductor cluster, and would help establish a foundation for leading the global power semiconductor market, according to Yonhap.
The compound semiconductor manufacturing infrastructure project aims to build an 8-inch full-process manufacturing platform for power semiconductors that can operate reliably in extreme environments.
The SiC substrate analysis project aims to support high-quality power semiconductors by building an integrated analysis platform covering substrate defect analysis, design links, and manufacturing-process verification.
Pusan National University, Dong-eui University, and Busan Techno Park plan to introduce five types of core equipment, including substrate defect inspection tools, and build an advanced analysis base to support related companies, Yonhap reported.
"Global competitors in power semiconductors are already entering maturity, and Chinese companies have already caught up considerably in key technology areas, but Korea has too few power semiconductor chips that can actually be used," an industry official told ETNews. "The ecosystem urgently needs to be revitalized with the government at the center."
Article edited by Jerry Chen
