Chip, display companies to invest W52 tril. by 2024
Minister of Trade, Industry and Energy Paik Un-kyu, center, poses with senior executives from major chip and display manufacturers, including Samsung Electronics Vice Chairman and CEO Kwon Oh-hyun, second from left, and SK hynix Vice Chairman Park Sung-wook, second from right, following a meeting at a Seoul hotel, Monday. Yonhap
By Kang Seung-woo
The nation’s chip and panel makers, led by Samsung Electronics, SK hynix and LG Display, will invest a combined 52 trillion won ($46 billion) to build factories and help create jobs over the next seven years.
The massive investment plan came Monday when Minister of Trade, Industry and Energy Paik Un-kyu held a meeting with Kwon Oh-hyun, vice chairman and CEO of Samsung Electronics, Park Sung-wook, vice-chairman of SK hynix, LG Display CEO Han Sang-beom and other business leaders.
Samsung, the world’s largest chip manufacturer, said it will invest 21.4 trillion won by 2021 in memory chips and organic light-emitting diode (OLED) displays in Pyeongtaek, Gyeonggi Province, and Asan, South Chungcheong Province.
SK hynix, the nation’s No. 2 chipmaker, said it will build NAND flash memory plants in North Chungcheong Province by 2024, spending 15.5 trillion won.
LG Display, the world’s largest liquid crystal display (LCD) panel maker, also plans to invest 15 trillion won by 2020 to establish OLED factories in Paju, Gyeonggi Province, and Gumi, North Gyeongsang Province.
During the meeting, Kwon asked the government to help nurture personnel and research and development (R&D) in the semiconductor industry.
Han also said there should be no discrimination between major companies and smaller businesses as the former have trouble receiving the government’s financial support for its R&D with subcontractors.
Raising the minimum wage and industrial electricity rates were also on the agenda.
In July, the minimum wage for next year was set at 7,530 won per hour, up 16.4 percent from this year. But business leaders expressed concerns over the decision to hike the minimum wage for next year, saying it could worsen business conditions and hamper job creation.
“The government will seek measures to support companies that are struggling with the rising minimum wage,” Paik said.
The companies also complained of their difficulties to secure professional human resources.
According to the Korea Electronics Association (KEA), the nation’s electronics industry, including semiconductor manufacturers, has been struggling with a shortage of workers.
During the second half of last year, the electronics industry generated 53,457 jobs, but recruited just 46,429 people to fill them, the KEA said.
In response to the growing concerns, the trade minister said the government will form a task force to deal with the problem in coordination with relevant organizations.
The minister also said the government will expand support for the semiconductor and display sector — one of Korea’s main export drivers and the core of the next generation technology revolution.
“China has made big investments in these industries to close the technology gap with industry leaders, which could potentially lead to a global supply glut,” Paik said. “Korean companies will have to pay extra attention to counter attempts of technology leakage and brain drain by competing nations.”
Korean chipmakers have benefited from increased overseas demand and higher prices this year, with outbound shipments of computer chips surging 52 percent year-on-year to $50.5 billion in the first eight months of this year, according to the Korea International Trade Association.