Former ministers give advice about future of Korea’s semiconductor industry

Former ministers attend a special talk held at FKI Tower in Yeouido, Seoul on October 14. From left, former Ministers of Trade, Industry and Energy Lee Chang-yang and Yoon Sang-jik, former Minister of Knowledge Economy Lee Yoon-ho, former Minister of Trade, Industry and Energy Sung Yoon-mo, and former Minister of Science and ICT Lee Jong-ho. Yonhap News

Korea, the world‘s most competitive player in memory semiconductors, could be on the brink of a crisis due to technological limitations and China’s catch-up, according to former ministers of trade, industry and energy. Without bold innovation and full government support, the former ministers fear that Korean companies could follow in the footsteps of Japan‘s Toshiba, once a “semiconductor giant” but now in decline, and U.S. Intel, which has fallen from grace.

The Federation of Korean Industries (FKI) held a special talk on October 14 at FKI Tower in Yeouido, Seoul, titled “Korea’s Tasks to Recapture Semiconductor Supremacy,” featuring former ministers of trade, industry and energy.

Hwang Cheol-sung, a chair professor of materials engineering at Seoul National University and Korea’s leading semiconductor expert, was particularly wary of China's pursuit in his presentation. The slow development of the domestic system semiconductor sector and the decline in competitiveness in the memory sector have emerged as a source of anxiety for the future of Korea‘s semiconductor industry,” he said. ”The entry of Chinese semiconductor companies into the memory sector with state support will pose a great challenge to the development of Korea’s semiconductor industry in the future.”

In the conversation that followed, it was suggested that Korea should introduce support measures, such as subsidies and direct rebates, similar to those in the U.S. and China. A direct rebate system is a cash payment of the difference or the entire deduction if the deduction is larger than the tax a company owes, or if there is no tax at all.

“Support for the semiconductor industry should not be viewed as a benefit for individual companies,” said Lee Yoon-ho, former Minister of Knowledge Economy. ”The U.S., China, and Japan have decided to provide massive subsidies because semiconductors are directly related to national competitiveness and national security.”

“The government should provide full support for the semiconductor industry at a faster pace than other countries,” said Sung Yun-mo, former Minister of Trade, Industry and Energy. ”We should foster Fabless (semiconductor design companies) and strengthen support for the semiconductor material, component and equipment industries.”

Former Minister of Trade, Industry and Energy Lee Chang-yang also said, "In order for semiconductor companies to secure a competitive advantage, effective policy responses from the government to support them are needed in addition to accurate management judgment and agile response. Active policy efforts are urgently needed to secure infrastructure, such as electricity, that the private sector cannot do." Yoon Sang-jik, former Minister of Trade, Industry, and Energy, emphasized that “essential prerequisites, such as technical manpower, funding, power, and data, must be met for the development of the semiconductor industry.”

Lee Jong-ho, former Minister of Science and ICT, suggested, "The development of low-power semiconductor technology that can reduce the enormous power consumption of artificial intelligence (AI) should be made quickly and effectively through cooperation between industry and academia."

Lee Sang-ho, head of the Korea Economic Industry Division of the FKI, said, “The cases of Toshiba and Intel show that even seemingly solid market dominance can quickly collapse due to innovation failures and lack of support. The government needs to take swift action to strengthen innovation capabilities and expand infrastructure.”

※This article has undergone review by a professional translator after being translated by an AI translation tool.