Samsung is planning to invest in South Korea’s massive chip production scheme

The South Korean government’s initiative to create a massive semiconductor hub in the nation is being supported by a 300 trillion won ($230.8 billion; £189.6 billion) investment by electronics giant Samsung over a 20-year period.

The company stated that this will be used to establish five semiconductor plants. Samsung is the world’s largest manufacturer of memory cell phones and TVs.

The stated strategy calls for enhanced tax benefits and infrastructure support to be given to high-tech businesses as incentives.

According to a statement released on Wednesday by the country’s Ministry of Commerce, Industry, and Energy, the mega cluster will serve as the main foundation of South Korea’s semiconductor ecosystem.

“To push forward as a leading country in the middle of tough global competition for sophisticated sectors,” it claimed it planned to attract around 550 trillion won in private sector investment.

The decision by South Korea coincides with “key companies stepping up efforts to enhance onshore manufacturing in the semiconductor sector,” according to Paul Triolo of the international advisory firm Albright Stonebridge Group.

“China wants to somewhat imitate Taiwan’s clustering effect, where the trinity of scientific parks constitute a big cluster that has drawn countless additional enterprises, both upstream and downstream in the supply chain,” the source added.

A violent trade war between the US and China is centered on semiconductors, which power everything from mobile phones to military weapons.

Washington stated in October that it will demand licences from businesses supplying chips to China created with American equipment or software, regardless of where in the globe they were produced.

In order to safeguard national security, the Netherlands announced last week that it too intended to impose limitations on the sale of its “most advanced microprocessor technology.”

The US position on semiconductors was a source of concern at the same time for South Korea’s commerce ministry.

China has frequently referred to the United States as a “tech hegemony” in response to export restrictions enforced by Washington. Several significant microprocessor producers, including SK Hynix, are based in South Korea.

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