Samsung veteran Yang Hyang-ja has argued that South Korea must boost its semiconductor industry amid a chip war between the US and China, as reported first by SMCP.
A signboard of Samsung Electronics is displayed outside the company's Seocho building in Seoul on October 27, 2022. - South Korean tech giant Samsung Electronics on October 27 said its third-quarter operating profits were down 31.39 percent year-on-year after a global economic downturn hit demand for consumer electronics.
Chip War
Yang has spent at least three decades with Samsung Electronics and was instrumental in establishing the company's current position as the world's leading manufacturer of memory chips.
She is also the chief architect of a national initiative to fund and energize its domestic chip sector.
According to her interview on Bloomberg Television, her goal is becoming more crucial as the US, China, and Japan invest billions in creating their own chip supply chains, casting doubt on Korea's potential role in the semiconductor industry.
She echoed the opinions of those in China and the US who are investing talent, resources, and government initiatives in the creation of chips that will power future technologies such as the metaverse, AI systems, and military technologies.
In a December interview, Yang declared that they are in a "chip war," adding that technology dominance will enable the country to lead any security-related agenda, such as diplomatic and defense matters, without being influenced by other countries.
Yang claimed that Seoul could strengthen its position in the US$550 billion global chips market only through direct intervention.
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US Chips Act
The US Chips Act was approved by the Korean parliament last month. Yang is the driving force behind the initiative, which will speed up clearance procedures for the construction of industries while also boosting tech-centered schools.
The parliament also approved a draft measure granting a tax credit of 8% to large companies making investments in the semiconductor industry. This is far less than Yang's request of 20% to 25%, as noted by SMCP.
The finance ministry revealed a plan on Tuesday to raise the tax credit on capital expenditures for large businesses to up to 25%.
According to Yang, more South Korean corporations may relocate their main manufacturing facilities to the US and transfer their best engineers with them if the government does not increase its incentives.
Samsung has also proposed spending about US$200 billion on several plants in Taylor and Austin, along with a US$17 billion semiconductor complex in Texas.
According to Yang, South Korea has a special potential to buck this trend. The majority of cutting-edge semiconductors powering the most recent iPhones, supercomputers, and other technologies are made by Taiwan Semiconductor Manufacturing Co. (TSMC).
Yang claims that Samsung is the only company in the world that can replace TSMC.
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