Foundry, fabless need more int’l cooperation

LEE BYOUNG-HUN
The author is a professor of semiconductor engineering at Postech.

The winning strategies of Korea’s rivals in the world war of semiconductors are gradually taking shape.

Under the banner of manufacturing reshoring, the United States is trying to dominate both next-generation and manufacturing technologies. China is making an all-out effort to expand domestic semiconductor production capacity. Taiwan is actively working with Japan and the United States to maintain its absolute dominance in the foundry industry and is preparing to expand to China at any time.

Meanwhile, Japan seeks to revive its semiconductor manufacturing companies by strengthening its materials, parts, and equipment industry in cooperation with Taiwan and the United States. Europe is poised to increase self-sufficiency in semiconductors and strengthen its competitiveness in specialized fields. Competitors are making the best possible decisions for their current positions in the chip industry.

Korea must establish a bridgehead in the foundry or fabless sector while firmly maintaining manufacturing competitiveness in the memory sector, breaking well away from China and the U.S.-Japan alliance.

The starting point is to humbly admit that Korea is weak in the foundry and fabless categories and establish an appropriate strategy. It is easy to become exhausted if Korea uses the No. 1 strategy in a new field just because it is the leader in the memory field. For the weak to deal with the strong, “unity with the weak” or “working with the strong” is necessary. The foundry business needed a Korea-U.S. alliance or a Korea-Taiwan link. SK Hynix is cooperating with TSMC, wisely using its strength to create a link.

Given the size and market of related companies, strategic cooperation with China in fabless is necessary, but it can hardly be a realistic option due to the blockade policy of the United States. Korean companies, therefore, need to carefully make relationships with the fabless powers of the United States. Korean companies should take a part in the new ecosystem created by OpenAI or become big enough to cooperate in fabless, which has insufficient manufacturing bases, with the likes of Google and Meta.

Although excellent research results in the field of artificial intelligence and semiconductors are frequently reported in domestic news, a consistent strategy is needed rather than minor achievements. Through bold mergers and acquisitions, a fabless company with the capacity to establish itself in the global competitive system should be created. While there is no public announcement yet, I assume active discussions are underway among concerned parties.

In the midst of the turbulent global chip war, leading chipmakers like Intel and Nvidia are actively trying to show their company’s vision and are running around in all directions. The global strategies and visions of Korea’s chip industry leaders are more important than ever.