{"id":2206445,"date":"2024-09-11T18:47:44","date_gmt":"2024-09-11T09:47:44","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206445"},"modified":"2024-09-12T15:11:07","modified_gmt":"2024-09-12T06:11:07","slug":"south-korea-bets-205m-on-semiconductor-packaging-to-maintain-competitiveness","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/09\/south-korea-bets-205m-on-semiconductor-packaging-to-maintain-competitiveness\/","title":{"rendered":"South Korea bets $205M on semiconductor packaging to maintain competitiveness"},"content":{"rendered":"
South Korea\u2019s trade ministry <\/span>announced<\/span><\/a> a $205 million (274.4 billion won) investment in the country\u2019s semiconductor packaging industry to keep pace in the rapidly advancing fields of artificial intelligence (AI) and high-performance computing (HPC).<\/span><\/p>\n However, despite this investment and a newly signed memorandum of understanding (MOU) between key industry players, the country\u2019s historical focus on vertical integration and weak horizontal collaboration raises concerns about whether it can remain competitive in advanced packaging technologies.<\/span><\/p>\n LACK OF HORIZONTAL INTEGRATION<\/b><\/p>\n South Korea\u2019s success in memory chip manufacturing has been largely built on <\/span>vertical integration<\/span><\/a>, where companies like Samsung Electronics and SK Hynix control everything from chip design to final assembly.<\/span><\/p>\n However, advanced packaging technologies, which provide the protective casing for semiconductors and are essential for AI and HPC, demand a more collaborative approach. The <\/span>horizontal integration<\/span><\/a> required for these technologies \u2014 where semiconductor manufacturers, materials suppliers and equipment producers work together \u2014 remains less common in South Korea.\u00a0<\/span><\/p>\n Many South Korean packaging firms are heavily dependent on a few large contractors, with <\/span>70 to 90%<\/span><\/a> of their revenue tied to companies like Samsung and SK Hynix. This reliance limits broader innovation within the industry, leaving smaller firms with limited capacity to invest in research and development (R&D) independently.<\/span><\/p>\n In contrast, Taiwan Semiconductor Manufacturing Company (TSMC), a global leader in advanced packaging, benefits from a more diverse network of <\/span>clients and suppliers<\/span><\/a>. This collaborative approach has enabled TSMC to lead the industry with <\/span>custom packaging solutions<\/span><\/a>.<\/span><\/p>\n This lack of horizontal integration is critical because advanced packaging requires a robust ecosystem of materials suppliers, equipment manufacturers and semiconductor designers. Technologies like <\/span>chiplet packaging<\/span><\/a> and <\/span>3D stacking<\/span><\/a> are central to the future of AI and HPC chips, as they help improve power distribution and data processing.<\/span><\/p>\n South Korea\u2019s weak collaboration across these sectors could prevent domestic firms from fully capturing the growing market for advanced packaging.<\/span><\/p>\n RELIANCE ON FOREIGN SUPPLIERS<\/b><\/p>\n Another risk is South Korea\u2019s heavy reliance on foreign suppliers for the materials and equipment required for advanced packaging.\u00a0<\/span><\/p>\n