Samsung Invests in Meg- Chip Production Plan in South Korea

Photo credit: Korea joongAng Daily| Samsung Invests in Meg Chip Production Plan in South Korea

Electronics giant Samsung said it plans to raise around 300 trillion won ($230.8 billion) over 20 years.

Five chip factories are to be built with this, the company told the BBC. Samsung is the world's largest manufacturer of memory chips, smartphones and televisions.

According to the official plan, high-tech companies are to be offered incentives such as extended tax breaks and infrastructure subsidies.

"The mega-cluster will be the fundamental foundation of our semiconductor ecosystem," South Korea's Ministry of Commerce, Industry and Energy said in a statement on Wednesday. Said it plans to secure about 550 trillion won in private sector investment and "rise as a leading country in fierce global competition in cutting-edge industries." South Korea's move comes as "key players step up efforts to increase onshore production in the semiconductor sector," Paul Triolo of global consultancy Albright Stonebridge Group told the BBC.

“I would like to emulate Taiwan's concentration effect to some extent, where the trifecta of science parks.... form a huge cluster that has attracted many other companies, both upstream and downstream,” he said. The semiconductors that power everything from cell phones to military equipment are at the center of a bitter dispute between the United States and China.

In October, Washington announced it would require licenses from companies that export chips containing American tools or software to China, regardless of where in the world they are made. Last week, the Netherlands said it would impose export restrictions on its "most advanced" microchip technology to protect national security.

Around the same time, the South Korean Department of Commerce expressed concern about US semiconductor policy. The department said the Chip Act "could increase business uncertainty, undermine companies' management and technology rights, and make the United States less attractive as an investment option".

China often calls the United States a "technological hegemon" in response to Washington's export controls. South Korea is home to other major microprocessor manufacturers such as SK Hynix.