The plan was revealed at a seminar held by the National Academy of Engineering of Korea. (Image courtesy of the National Academy of Engineering of Korea)
SEOUL, Dec. 19 (Korea Bizwire) – South Korean industry and academia have proposed creating a “KSMC” (Korea Semiconductor Manufacturing Company), modeled after Taiwan’s TSMC, to address challenges facing the nation’s semiconductor industry.
The plan, revealed at a seminar held by the National Academy of Engineering of Korea (NAEK) on December 18, aims to build a balanced ecosystem between foundries and fabless companies through diversified manufacturing processes, including both cutting-edge and legacy technologies.
Experts estimate that a KRW 20 trillion ($13.9 billion) investment in KSMC could generate KRW 300 trillion ($208.7 billion) in economic benefits by 2045. The initiative would support smaller system semiconductor companies, many of which are currently constrained by relying solely on Samsung’s advanced nodes under 10 nanometers.
“Taiwan maintains a balanced ecosystem where companies like UMC and PSMC focus on legacy and middle-tech processes, complementing TSMC’s advanced manufacturing.
This allows over 250 fabless firms to thrive naturally in Hsinchu,” said Professor Kwon Seok-jun of Sungkyunkwan University. “KSMC, launched with government support, could play a similar role in Korea.”
Concerns were raised about whether a public corporation like KSMC could handle advanced processes. SK Hynix CEO Kwak No-jung suggested repurposing some of Samsung’s legacy facilities as part of the plan.
At the event, the committee identified seven key challenges, including narrowing technological gaps with overseas competitors, weakening investment competitiveness, a lack of fabless and packaging growth, talent outflow, and excessive regulations.
Proposed solutions included strengthening the semiconductor ecosystem, increasing R&D investment, and implementing policies to attract and retain talent.
The Semiconductor Industry Association’s Ahn Ki-hyun emphasized the urgency of timely investments, advocating for KRW 300 trillion ($208.7 billion) in government support—via subsidies and tax credits—by 2047 to sustain Korea’s semiconductor leadership.
He also called for greater flexibility in Korea’s 52-hour workweek policy, citing feedback from TSMC engineers that faster-paced development often requires extended work hours.
Kwak concluded by urging a shift from trickle-down support for large corporations to a “fountain effect,” where direct investment in smaller materials, parts, and equipment firms could expand the entire ecosystem through strengthened R&D competitiveness.
The initiative underscores Korea’s ambition to secure its position in the global semiconductor race while addressing structural weaknesses in the industry.
Ashley Song (ashley@koreabizwire.com)
