5 fabless chip companies recognized, receive award and support

Industry

Published: 27 Jul. 2022, 18:17 Updated: 27 Jul. 2022, 19:22

5 fabless chip companies recognized, receive award and support

Lee Young, the minister of SMEs and Startups, speaks during an award ceremony of Fabless Challenge contest held in Gangnam District, southern Seoul, Wednesday. [MINISTRY OF SMES AND STARTUPS]

Seeking a breakthrough in a global system chip race where Korea lags, the SMEs ministry is handing out a total of 500 million won ($380,662) to five chip designing companies, with production support from Samsung Electronics.

“Semiconductors are Korea’s next growth driver and the key technology of the fourth industrial revolution,” stressed Lee Young, the minister of SMEs and Startups, during an award ceremony for the “Fabless Challenge” contest held in Gangnam District, southern Seoul, Wednesday.

A fabless refers to a company that designs a chip but does not manufacture it.

Hosted by the SME ministry with support from Samsung Electronics, the Fabless Challenge is a contest for non-memory chip designer companies. The five winners will receive up to 100 million won each from the Ministry of SMEs and Startups, and Samsung Electronics will produce prototypes of chips designed by the companies.

Choi Si-young, president and head of contract chipmaking — or foundry — business at Samsung Electronics, attended the Wednesday event.

“It is true that Korea’s system chip sector is lacking competitiveness compared to global frontrunners,” said Choi. “In order to overcome such challenge, I believe that organic cooperation among fabless companies, foundries and part suppliers is absolutely necessary.”

The goal of the contest is to help fabless companies that are struggling to test and produce their products due to foundry shortages, according to the SMEs ministry.

“I was told by fabless companies that the three biggest challenges for them are fundraising, hiring personnel and establishing cooperation with other companies,” said Minister Lee.

Lee promised active support to facilitate collaboration between chip designers and manufacturers, emphasizing that “we need to create one team with every player within our borders to secure global competitiveness.”

Five fabless companies selected as the winners are: DeepX, an AI chip company; GLS, specializing in processing chips for wireless connection; SKAIChips, which is developing battery-less devices powered by renewable energy; Semibrain, an embedded flash memory company; and Raontech, developing system chips for wearable display devices.

“Korea needs a company that can compete with global fabless companies, such as Intel, Nvidia, ARM and Qualcomm,” said Kim Lok-won, DeepX CEO.

Kim emphasized that now is the chance for Korea to come out ahead in the global system chip race before the gap between Korea and the frontrunners grows even bigger in the future.

“Rather than keeping up with the advanced technologies, coming up with a proprietary technology to join the frontrunners in the race is necessary for the system chip designers,” said Kim.

While Korea is one of the leading countries in memory chips, the country lags far behind its rivals in the non-memory chip race. Korea claimed about 1 percent of the global fabless market share last year, and LX Semicon is the only Korean company within the top 50 fabless companies.

The government would like the private sector to invest 340 trillion won in semiconductors through 2026, with the goal of increasing Korea's global system chip market share to 10 percent from the current 3 percent.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]