A significant portion of the $230 billion that Samsung Electronics will spend on business development over the next 20 years will be used to attract suppliers of technological equipment for chip manufacturing to South Korea. Samsung is following the path of TSMC in Taiwan in this regard.

In March, Samsung Electronics announced that it plans to invest $230 billion over the next two decades in the development of a technology cluster south of Seoul. The South Korean government aims to facilitate the implementation of this plan by providing tax breaks and subsidies to attract foreign lithography equipment suppliers to the region. The importance of geographical concentration of production has been highlighted by the pandemic, and the geopolitical separation of economic blocs is pushing market participants to take similar steps.

At the very least, as the Nikkei Asian Review explains, the South Korean market will allow equipment suppliers that have lost the opportunity to do business in China to recoup the corresponding losses. Korean companies are guided by similar considerations, because sooner or later Samsung and SK hynix will lose the opportunity to effectively expand memory production in the PRC. The development of domestic production is a reasonable alternative to them.

According to the source, several equipment suppliers have already expressed interest in locating units in South Korea. The main part of economic activity will be concentrated in the densely populated Gyeonggi-do province surrounding the capital. The American company Applied Materials, which supplies lithographic equipment, will open its research center here in a few years. The Netherlands’ ASML plans to build an assembly plant and a training center in the area, which will be operational as early as next year. In addition to training specialists for Korean companies, ASML will be able to use this site to perform quick repairs of its equipment.

Japanese companies are also eagerly looking at possibilities to localize their facilities in South Korea. Tokyo Electron, Ulvac, Kokusai Electric and Hitachi High-Tech are ready to build “clean rooms” in this country. The presence of local labs will allow companies to quickly introduce new technologies to South Korean customers’ production lines. In return, Samsung Electronics will open a research center in Japan to accelerate interaction with local partners.