ED Bolster non-memory chips
Government's R&D support crucial to securing technology
The semiconductor industry, the nation's largest export engine, is drawing greater attention these days. In this non face-to-face era, when storing and analyzing data have become more critical than ever, demand for chips is rising steeply. Many system semiconductors, or non-memory chips, are being mounted on new machinery and equipment, including self-driving cars. Amid soaring demand, competition is becoming fiercer among foundries, which manufacture computer chips designed by others on a consignment basis.
The boom-and-bust cycles of the industry determine not only individual company's share prices but also the nation's overall export performance. Korea is a global powerhouse in the memory chip sector. To maintain the country's status in the semiconductor industry, however, it is imperative to upgrade the non-memory chip sector, too. If Korea manages to turn out logic chips as efficiently as memory chips, it will become an absolute power in the global industry.
On Monday, the government unveiled the “K-fabless” plan to foster companies that design semiconductors. It will provide 250 billion won ($223 million) to support research and development of logic chips. The plan aims to secure technology that dominates rival countries and write “another DRAM legend” in the system semiconductor sector. The policy is a move in the right direction. The government should prime the pump to create a favorable environment; and then the private sector should follow with massive investment to secure advanced technology and enlarge its global market share.
Samsung Electronics and SK hynix should challenge the global market in new promising areas, such as power chips, next-generation sensors and automobile semiconductors. No less important is how to promote small- and mid-size “fabless” startups. To keep up with system semiconductors' characteristics, summed up as “multi-type, small-quantity production,” Korea needs to nurture many small but strong fabless players. The government should provide various policy supports for young venture enterprises armed with creative ideas. Korea is a latecomer in the logic chip sector, and the latest plan may not produce results soon. However, the country has no other choice but to invest more to meet constant challenges.