Samsung Electronics (005930.KS) is pushing to make a large-scale investment in the South Jeolla and Gwangju area and build a semiconductor packaging plant. SK hynix (000660.KS) is also expected to unveil an investment plan. Based on the investments by the chip industry's "top two," the government plans to develop the southwestern region as a key hub for semiconductor front-end and back-end processes.
According to industry sources Monday, Samsung Electronics is conducting a final review of an investment plan to build a semiconductor packaging plant in the Jeonnam-Gwangju Integrated Special City, set to launch on the first of next month. Semiconductor packaging is a back-end process that finalizes the packaging of chips. The more advanced the semiconductor, such as high-bandwidth memory (HBM) and cutting-edge system chips, the greater the difficulty and importance of packaging.
This large-scale investment plan is tied to the government's plan to nurture the semiconductor industry in the regions. The government views the domestic semiconductor industry as concentrated in the Seoul metropolitan area geographically and in memory chip manufacturing by sector. It is therefore devising a plan to place semiconductor front-end and back-end industries in non-metropolitan areas and intensively develop them.
The city of Gwangju is also taking steps to prepare for this. In fact, Gwangju recently moved to draw up a "semiconductor cluster development master plan" through an affiliated agency. The city plans in particular to analyze the conditions of upstream and downstream semiconductor industries and draft short-term and mid- to long-term roadmaps to foster the industry. The Ministry of Trade, Industry and Energy also plans to provide up to 100% support for the construction costs of industrial infrastructure when building semiconductor clusters in non-metropolitan areas, through the Special Semiconductor Act set to take effect in August.
"In the design field at the front end and the packaging field at the back end of the semiconductor industry, we will nurture hubs so that the ecosystem can grow quickly in the Gwangju and South Jeolla region," a government official said.
"With fine-process technology hitting its limits, greater investment is needed in the packaging industry," an industry official said. "This can be a win-win investment for balanced regional development and the semiconductor industry."
