S. Korea adds speed in localization of components, equipment for chipmaking

2021.02.22 12:00:23 | 2021.02.22 15:07:28

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South Korea has made rapid progress in localizing the value chain behind semiconductor production through a collaborated push from the government and chipmakers.

Hansol Chemical Co. recently succeeded in developing TDMAS, a material used in making the thin film for chips that Samsung Electronics annually imports 80 billion won ($72.5 million). Samsung Electronics willingly tested the product, accelerating the certification and mass production.

DB HiTek Co. also backed a local producer’s development of green gas elimination equipment used on wafer lines. Genesystem Co. is ready for mass production after joint trials with financing from the government. DB HiTek imported 30 billion won worth of the equipment from Japan and Germany.

Localization of semiconductor components and equipment has gained push from the government following trade barriers from Japan and unsettling value chain in China.

The Ministry of Trade, Industry and Energy has been matchmaking suppliers and chip producers to replace imports with financing of up to 500 million won per project.

Under the backing program since 2019, a total of 113 firms from semiconductor and display sectors have had their products verified for mass production at the clients’ side. Of them, 26 firms have landed supply contracts, allowing local semiconductor makers replace imported components and equipment with those made domestically.

The trade ministry said it is running a total of 132 projects, as of Sunday, to help local developers test their technology for mass production. This year, it has added four more sectors, including automobile and machinery, in the program, and expanded the related budget to 40 billion won from last year’s 35 billion won.

The Korean government has turned aggressive in aiding local companies to develop high-tech materials, components, and equipment since the Japanese government’s sudden decision to tighten export curbs on the country’s high-tech materials that are essential in manufacturing semiconductor and display, Korea’s mainstay export items, in 2019.

By Oh Chan-jong and Cho Jeehyun

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