Ministry program seeks to remedy Korea's fabless gap

Korea is fostering 20 fabless chip designers as part of the country's effort to become a chip powerhouse. The Ministry of Trade, Industry and Energy announced Monday it has initiated a long-term project dubbed the Global Star Fabless Project.

Korea is fostering 20 chip designers or fabless [SHUTTERSTOCK]

Korea is fostering 20 fabless chip designers as part of the country's effort to become a chip powerhouse.

The Ministry of Trade, Industry and Energy announced Monday it has initiated a long-term project dubbed the Global Star Fabless Project.

Under the project, the ministry selected 20 Korean chip design companies to receive government support for technology development, the manufacture of test products, financing, global marketing and the nurturing of chip design experts.

Ten of the selected 20 Korean chip designers are believed to have global potential, including MCU (micro controller unit) designer Abov Semiconductor, NFC designer 3ALogics and OLED panel chip designer HiDeep.

The remaining 10 are up-and-coming ones that are less than seven years old but possess proprietary technology. The list includes AI chip designers Mobilint and Supergate and display chip designer Sapien Semiconductor.

"The importance of the fabless sector has been emerging with the rapid growth of the system chip industry and the arrival of future industries such as AI and electrification," said Joo Young-joon, the ministry's deputy minister for the Office of Industrial Policy.

"By providing diverse state support to potential fabless companies, we will enable the birth of globally high-ranked fabless companies, and through matching demands and supporting technology development, we will provide the fabless industry with a chance to develop new products."

Fabless designers design chips while outsourcing their fabrication to specialized companies. The fabless sector's presence in the global chip industry is growing as chips grow more complex.

Citing last year's numbers, the Ministry of Trade, Industry and Energy said Korea has a lead in chip manufacturing but lags behind in chip design compared to rivals like the United States. The world's top 30 chip designers, including Nvidia and Qualcomm, account for 90 percent of the market share, while those from Korea account for a mere one percent.

As a result, the Korean government has been helping the fabless sector achieve its goal of becoming a semiconductor powerhouse.

It has been offering EDA (electronic design automation) tools and working spaces to fledgling chip design firms. It has also been supporting them with multi-project wafers, a cost-effective way to prototype multiple designs onto a single wafer.

The government also created a 300 billion won ($22.6 million) fund in June to help domestic chip designers financially and is establishing a so-called "system semiconductor cluster" in Yongin, Gyeonggi.

A batch of land where the Korean government will build a "system semiconductor cluster" in Yongin, Gyeonggi [NEWS1]

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]