Korea Attracts Foreign Hi-Tech Companies with Huge Market Opportunities

Korea turns out to be one of the world’s most attractive foreign direct investment destinations, as the country has become one of the world’s hi-tech manufacturing hubs. 

Despite mounting geopolitical crises that have shaken up global supply chain system to the root, Korea has cumulatively attracted US$21.52 billion in the past 9 months of 2022, a whopping 18.2% year-on-year jump, surpassing the US$20 billion hallmark for the first time on record.

“Technology innovations, an abundant pool of highly talented and well-educated workforce, and well-established manufacturing infrastructure have been main magnets for the upsurge in the foreign direct investments, “said Ahn Duk-Geun, minister for trade with the ministry of trade, industry and energy at a press conference for “Invest Korea Week 2022” on Nov. 2.

According to the ministry, foreign direct investments in manufacturing sectors more than doubles to US$7.8 billion, as foreign hi-tech companies have rushed to Kora to supply the country’s well-established high-tech manufacturing ecosystem for semiconductor, secondary battery cells, and electric vehicles.

A case in point is the country’s semiconductor chip industry. As the country’s two semiconductor chip makers – Samsung Electronics and SK Hynix – supply more than 50% of global memory chip market, the chip manufacturing ecosystem is big enough to provide huge market opportunities for foreign raw materials and equipment makers.

Attractive Investment Hubs for Hi-Tech Manufacturing

“Invest Korea Week 2022” was held in Seoul from Nov. 2 to Nov. 4

“Korea has been attractive enough markets for Edwards, as we have seen huge market opportunities in supplying the country’s massive chip-making and display panel manufacturing supply chain. 10 years after we had established our first manufacturing facilities for vacuum pumps in 2011, we have completed our 2nd factory in Asan City in June 2022 with a capital infusion of US$50 million,” Jason Yun, CEO with Edwards Korea, a Korean subsidiary of Edwards Ltd.

Also known as Edwards Vacuum, Edwards Ltd is a U.K.-based multinational manufacturer of vacuum pump and abatement system.

The company has been supplying vacuum pumps for Korean chip and display panel makers for more than 20 years, as its vacuum pump product line-up are widely used in chip-making and display panel fabrication processes to create vacuum environment. The creation of vacuum environment is to accelerate electron mobility.

Edwards Korea also has earmarked US$60 million to establish its 3rd factory in Asan City. Scheduled to come online in July 2023, the 3rd factory plans to produce abatement and integrated system.

“The success story of Edwards Korea proves how suitable Korea has become for hi-tech manufacturing. It is also a strong evidence that our “local for local” strategy is the right choice for this geopolitically risky era, “ stressed CEO Yun.

The “local for local” strategy is to localize its manufacturing capability by relocating its manufacturing sites closer to target markets or customers.

China’s CNGR Advanced Materials Eyes Korean Markets

Minister Ahn speaks of Korea’s attractions as global high-tech manufacturing hub

He believes that the localization of manufacturing facilities will continue across all industries, as that is the right answer to tackle geopolitical challenges like pandemic and wars, making companies relatively immune from bottlenecks or disruption in supply chain network and logistics.

He cited strong manpower, well-established manufacturing ecosystem, the government’s proactive support as the attractions of Korea for foreign investments.

Korea’ s well-established secondary battery manufacturing ecosystem is also luring foreign investors, promising to offer market opportunities.

According to the ministry, Heraeus of Germany and CNGR Advanced Materials of China is considering to invest in Korea to supply the country’s secondary battery cells and semiconductor chip makers.

Heraeus is a German maker of silica, quartz, and other engineering chemical compounds. CNGR of China is a world leader in cathode precursors for secondary battery cells. Heraeus has been operating its own facilities in Korea, including one JV. The German company is considering investing more to build up more capacity.

CNGR Advanced Materials of China has already signed up a deal with SK Ecoplant, a unit of SK Group on Sept. 27 2022 to tap the possibility to set up a research and development JV in Korea to produce ternary precursor cathode materials as well as battery-grade lithium carbonate.    

The ministry is now hosting “Invest Korea Week 2022”, a global investment forum that opens from Nov. 2 to 4.

About 80 foreign companies doing businesses in hi-tech areas like secondary battery, semiconductor, bio, and EVs are joining the forum to have one-on-one matching meetings with the country’s 220 small-and-medium sized companies to tap the possibility of building up JV manufacturing facilities.

“Invest Korea Week 2022” is an annualized promotional IR event for attracting foreign investors to join the country’s manufacturing and service ecosystem.