South Korea Forms Mega Cluster in Latest IC Investment

The Ministry of Trade, Industry and Energy (MOTIE) and Ministry of Science and ICT (MSIT) in South Korea held a joint discussion forum on measures for nurturing the world’s largest semiconductor mega cluster. It was attended by 110 civilians, comprising students, young researchers, residents of mega cluster districts and semiconductor industry workers. The forum carries the theme “Semiconductor Industry for Enriching Public Livelihood.”

Ministers of MOTIE and MSIT announcing the mega chip clusters.

The “Mega Cluster” area refers to the Pyeongtaek, Hwaseong, Yongin, Icheon, Anseong, Pangyo and Suwon districts. This cluster houses major companies and institutions in the semiconductor industry. The plan is to add 16 new fabs to the existing mega cluster (with 19 production fabs and two R&D fabs). Specifically, it involves a total investment of KRW 622 trillion (US$467 billion) by 2047 from private sources. Moreover, by 2027, it is forecast that three production fabs and two R&D fabs will be completed.

World’s Largest Semiconductor Cluster

Mainly, the mega cluster will be the world’s largest in terms of scale. It will stretch across 21 million square meters and produce 7.7 million wafers per month by 2030. The mega cluster is home to related materials, parts and equipment (MPE) manufacturers, public chip R&D institutions, fabless companies, and universities for educating future chip talent.

The Korean government and companies will be nurturing the production lines of high bandwidth memory (HBM) and other cutting-edge chips. It will create a system chip ecosystem for producing 2nm-or-less chips. Moreover, the new fabs will stimulate direct economic growth and shared growth of both MPE and fabless companies and their contractors. As a result, it will induce an estimated 650 trillion won in production output.

Massive Job Creation

Once the construction of mega cluster fabs begins, MPE firms will enjoy increased production and employment of 1.93 million workers. Moreover, as local businesses partake in the ripple effect and the construction of infrastructure expands for building of roads, electrical power and water facilities, it might create another 1.42 million job openings.

The operation of 16 new fabs on top of this development is expected to create another 70,000 plus job openings for experts in fab management at semiconductor manufacturing companies. As semiconductor fab MPE suppliers’ revenues are expected to climb by 204 trillion won, 40,000 new jobs will be further created. Moreover, in the process of fab management, another 110,000 will be newly employed for quality positions.

In total, the 622 trillion won worth of fab investment in the semiconductor mega cluster is expected to create 3.46 million new job openings directly and indirectly, enriching the livelihood of the public.

The Korean government plans to accelerate the establishment of the semiconductor mega cluster in this manner to achieve this year’s target of US$120 billion in chip exports and 60 trillion won worth of private investment.