New strategy needed to boost competitiveness
The world is suffering an increasingly acute shortage of semiconductors, particularly for automotive use. South Korea is no exception. That's why Industry Minister Sung Yun-mo has promised to work out measures to address the shortfall.
His promise came Friday during a meeting with representatives of the local chip industry, including CEOs of Samsung Electronics, SK hynix and DB HiTek. He said his ministry will soon announce a "K-semiconductor belt strategy" aimed at turning Korea into a global factory for advanced semiconductors.
Now the government should come up with comprehensive support programs for the industry. It needs to comply with the CEOs' request for more incentives for expanding manufacturing capacity, more investment in research and development, and an active response to the rapidly changing global market situation.
The shortage is feared to deal a blow to the automobile industry as carmakers such as Hyundai Motor, GM Korea and SsangYong Motor have suspended or plan to stop factory operations temporarily due to the shortage of chips for automotive use.
Thus the government and the industry should step up their cooperation to eliminate chokepoints in the supply chain and make a quantum leap in semiconductor manufacturing. The shortage is a setback to Korea, a semiconductor powerhouse. The country has so far focused on making memory chips, while neglecting non-memory chips such as system semiconductors.
The country can no longer drag its feet in beefing up the non-memory chip business if it really wants to become the world leader in semiconductor production. It could be left behind in an ever-intensifying global competition if it fails to make investments and develop technology.
Korea also needs to pay attention to the U.S. administration's plan to hold a virtual summit Monday with top executive officers from 19 global manufacturers, including Alphabet, the parent company of Google, Taiwan Semiconductor Manufacturing Company (TSMC) and General Motors.
The meeting is part of U.S. efforts to tackle the semiconductor shortage. The Biden administration recognizes chips as an issue directly linked to national security. Samsung Electronics, one of the world's largest supplier of memory chips, has been invited to the summit. The meeting seems to offer both an opportunity and a challenge for Samsung. The company will be able to expand its business as it is likely to be asked to invest more in America to produce more semiconductors.
Yet the concern is that Samsung might be drawn into the escalating Sino-U.S. rivalry under Biden's policy of containing the rise of China. If the company is forced to join a potential "semiconductor alliance" against the Asian giant, that could have an adverse impact on its factory operations in China. During a meeting with South Korean Foreign Minister Chung Eui-yong, April 3, Chinese Foreign Minister Wang Yi stressed the need for collaboration between the countries in the semiconductor industry. No one can rule out the possibility that Samsung and other Korean chipmakers might be caught in the crossfire of a U.S.-China technology war.
Against this backdrop, the Moon administration needs to work more closely with local semiconductor makers to map out a new strategy to turn the mounting challenges into new opportunities.
The world is suffering an increasingly acute shortage of semiconductors, particularly for automotive use. South Korea is no exception. That's why Industry Minister Sung Yun-mo has promised to work out measures to address the shortfall.
His promise came Friday during a meeting with representatives of the local chip industry, including CEOs of Samsung Electronics, SK hynix and DB HiTek. He said his ministry will soon announce a "K-semiconductor belt strategy" aimed at turning Korea into a global factory for advanced semiconductors.
Now the government should come up with comprehensive support programs for the industry. It needs to comply with the CEOs' request for more incentives for expanding manufacturing capacity, more investment in research and development, and an active response to the rapidly changing global market situation.
The shortage is feared to deal a blow to the automobile industry as carmakers such as Hyundai Motor, GM Korea and SsangYong Motor have suspended or plan to stop factory operations temporarily due to the shortage of chips for automotive use.
Thus the government and the industry should step up their cooperation to eliminate chokepoints in the supply chain and make a quantum leap in semiconductor manufacturing. The shortage is a setback to Korea, a semiconductor powerhouse. The country has so far focused on making memory chips, while neglecting non-memory chips such as system semiconductors.
The country can no longer drag its feet in beefing up the non-memory chip business if it really wants to become the world leader in semiconductor production. It could be left behind in an ever-intensifying global competition if it fails to make investments and develop technology.
Korea also needs to pay attention to the U.S. administration's plan to hold a virtual summit Monday with top executive officers from 19 global manufacturers, including Alphabet, the parent company of Google, Taiwan Semiconductor Manufacturing Company (TSMC) and General Motors.
The meeting is part of U.S. efforts to tackle the semiconductor shortage. The Biden administration recognizes chips as an issue directly linked to national security. Samsung Electronics, one of the world's largest supplier of memory chips, has been invited to the summit. The meeting seems to offer both an opportunity and a challenge for Samsung. The company will be able to expand its business as it is likely to be asked to invest more in America to produce more semiconductors.
Yet the concern is that Samsung might be drawn into the escalating Sino-U.S. rivalry under Biden's policy of containing the rise of China. If the company is forced to join a potential "semiconductor alliance" against the Asian giant, that could have an adverse impact on its factory operations in China. During a meeting with South Korean Foreign Minister Chung Eui-yong, April 3, Chinese Foreign Minister Wang Yi stressed the need for collaboration between the countries in the semiconductor industry. No one can rule out the possibility that Samsung and other Korean chipmakers might be caught in the crossfire of a U.S.-China technology war.
Against this backdrop, the Moon administration needs to work more closely with local semiconductor makers to map out a new strategy to turn the mounting challenges into new opportunities.
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