In early April, South Korean President Yoon Suk Yeol didn’t mince his words when describing why chips are paramount to the country’s economic survival.

“The competition over semiconductors unfolding now is an industrial war,” Yoon told government and industry officials. “An all-out war between countries.”

South Korea has a massive war chest prepared for future semiconductor manufacturing: roughly $450 billion in private investment alone. That is roughly the same amount earmarked currently for chip production in the U.S., according to a recent industry estimate. With a plan sketched out to nearly 2050, Yoon’s government plans to support the creation of the world’s biggest chip-making cluster in South Korea, encompassing 37 factories, spanning eight cities and creating more than three million jobs.

Asia’s chipmaking champions in South Korea and Taiwan are U.S. allies, often seeing eye-to-eye on security and politics. But on semiconductors, they are increasingly friendly competitors—and Seoul and Taipei, with clear advantages, aren’t sitting idle as Washington looks to muscle back into production.

They offer lower costs, faster construction times and the benefits of an established supply chain. While a handful of Taiwanese and Korean companies are expanding their manufacturing footprints into the U.S., the most advanced technology is getting rolled out first back home.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

Taiwan Semiconductor Manufacturing Co., commonly known as TMSC, is expected next year to introduce the world’s smallest but most powerful chip in Taiwan—the type of breakthrough needed for cutting-edge artificial intelligence and smartphones. Samsung Electronics and SK Hynix are set to make their next-generation memory chips in South Korea, with the government orchestrating ready access to engineers, natural resources and suppliers.

The stakes are high for these chip-dominant economies. Semiconductors represent about one-fifth of South Korea’s exports. Unlike America’s Silicon Valley, Taiwan relies on a so-called Silicon Shield—the belief that its chip sector is so vital to global trade that it can deter a Chinese attack.

“They have an advantage because they have a broader ecosystem of suppliers across all facets of the supply chain,” said John VerWey, a nonresident research fellow at Georgetown University’s Center for Security and Emerging Technologies, a think tank.

To be sure, American companies such as Nvidia, Qualcomm and Apple design the world’s best chips. But in recent decades, the ability to manufacture them has overwhelmingly resided in Asia.

The U.S.’s future gains as a chip maker could be amplified by extra rounds of congressional funding or a major leap from Intel, the sole American company in the three-way race with TSMC and Samsung to produce advanced logic chips. Asia’s lead could also be imperiled should a military conflict break out in the Taiwan Strait or on the Korean Peninsula.

Though the U.S. share of global production of advanced logic chips is expected to grow significantly, the two Asian chip powerhouses will retain strength in key areas, including advanced logic-chip production and memory chips, according to a recent forecast through 2032.

Governments in both places are staying aggressive. In May, South Korea’s government announced a $19 billion support package to bolster its chip industry—more than double what had been floated just weeks earlier. Last year, Taiwan enacted government incentives, including a 25% tax deduction on research and development expenses, and these funds are now open for local companies to apply for.

Adding to the competition, China in recent days pledged roughly $48 billion to its national semiconductor fund, the largest installment ever. But with U.S. curbs in place, China’s ability to quickly compete on the high end with Taiwan and South Korea is likely limited despite the influx of government funds.

Taiwan’s tech advantage

Five decades ago, Taiwan pivoted toward semiconductors as part of its industrial transformation. Chips represented roughly two-fifths of the island’s exports last year. Taiwan’s economic affairs ministry, in written remarks to The Wall Street Journal in early May, called the industry the “divine mountain that guards the nation.”

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

Chips made using TSMC’s next-generation 2-nanometer process are on track to be mass-produced in Taiwan first in 2025, with U.S.-based production of such chips expected in 2028. TSMC’s dominance stems from its singular focus on chip-making, substantial investments, and collaboration with top tech companies on their most advanced chip-design blueprints, according to industry experts.

Roughly the same geographic size as Maryland, Taiwan packs together industrial hubs connected by high-speed railroads, science parks and chip factories. Engineers stand ready 24 hours a day to troubleshoot problems at a moment’s notice, according to Taiwan’s Ministry of Economic Affairs. In the U.S., TSMC has pointed to several disadvantages from talent recruitment to work culture. As a result, the company plans to charge more for its chips made at its Arizona facilities.

TSMC also dominates in advanced packaging—a key technique where chips are stacked atop one another, and which is used to produce chips that power chatbots such as OpenAI’s ChatGPT. Currently, all of TSMC’s advanced packaging facilities are situated in Taiwan, and the company hasn’t disclosed any plans to build them anywhere else.

“If TSMC has a problem, basically the whole global electronics industry has a problem,” said Handel Jones, chief executive of International Business Strategies, a chip-industry consulting firm.

South Korea’s ecosystem edge

On top of its $19 billion support package for the chip industry, South Korea has already attracted research-and-development facilities from top foreign partners for its enormous semiconductor cluster that is under way. That includes the Netherlands’ ASML Holding—the only company making advanced lithography machines that can produce cutting-edge chips.

The government plans to inject another roughly $7 billion toward supporting R&D efforts for AI. That includes further advances in the type of specialized memory chip critical for AI computing called high-bandwidth memory, or HBM, an area dominated currently by SK Hynix, which is currently Nvidia’s main partner for the chips.

The R&D efforts could happen anywhere, but such advances would need to be located close to facilities churning out the latest high-end memory, said Yun Doo-hee, who oversees the AI chip initiative at South Korea’s Ministry of Science and ICT. And those factories, he added, “are mostly here.”

The South Korean government has promised faster land approval, guaranteed access to electricity and expanded tax credits for infrastructure investments. Support programs are under way for areas perceived as relative weak points, such as logic chips. Top local universities, in partnership with companies and regulators, have created “semiconductor majors” at both the undergraduate and graduate levels.

The perk: free tuition and a guaranteed engineering job at Samsung or SK Hynix upon graduation.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT

S. Korea earmarks $24bn in aid, investment support for Africa

Seoul is hosting delegations from 48 African countries for a major summit this week 

President Yoon Suk Yeol on Tuesday announced billions of dollars in new aid and investment support for Africa, as South Korea looks to boost trade ties with the continent.

Seoul is hosting delegations from 48 African countries for a major summit this week, which Yoon had told AFP would aim to secure deals on everything from critical minerals to infrastructure projects.

At the opening of the event, Yoon pledged that the South Korean government would double its current official development aid to Africa to $10 billion by 2030, and would also provide $14 billion of export financing to help Korean firms expand trade and investment across the continent.

"We will also actively contribute to Africa's regional economic integration efforts through the African Continental Free Trade Zone (AfCFTA), which was launched in 2019," Yoon said.

The AfCFTA is styled as the biggest free-trade accord in the world in terms of population -- gathering 54 out of 55 African countries, with Eritrea the only holdout.

Yoon also vowed to "accelerate agreements" on multiple other trade partnerships.

While South Korea is eager to expand infrastructure and energy cooperation with African nations, Yoon said the East Asian country was mindful of the impact of climate change on the continent.

Citing projects such as the Olkaria geothermal power plant in Kenya and the construction of the Battery Energy Storage System in South Africa, "Korea will continue to expand its 'green ladder' and respond to the climate change crisis with African countries," Yoon added.

Earlier, Yoon had told AFP that there were "a myriad of viable projects where Korea and Africa can collaborate across the entire field of infrastructure."

That could include "the construction of roads, railways, airports and ports; smart city systems, including smart transportation; and the establishment of master plans," he added.

AfriPrime App link:  FREE to download...

https://www.amazon.com/Africircle-AfriPrime/dp/B0D2M3F2JT