![KRW300tn investment in world’s largest foundry in Yongin, Korea 2 111038 126475 119](http://www.businesskorea.co.kr/news/photo/202303/111038_126475_119.jpg)
The author is an analyst of KB Securities. He can be reached at jeff.kim@kbfg.com. — Ed.
SEC has announced plans to invest KRW300tn (until 2024) in the building of the world’s largest foundry complex (system semiconductor) in Yongin with five state-of-the-art fabs. About KRW150tn will go to establishing production lines (e.g., materials, parts, equipment). The Korean government will also build a system chip complex. Upon completion, the Yongin complex’s addition to the Giheung/Hwaseong/Pyeongtaek complexes will form the world’s largest semiconductor production cluster.
Reasons for investment in Yongin
-SEC’s decision to build in Yongin seems to be based on the following:
- With Pyeongtaek running out of space, SEC requires a new complex to expand its foundry capacity in its bid to maintain market share against rival TSMC.
- With Yongin only 10-15 minutes away from SEC’s semiconductor R&D facilities in Giheung and Hwasung, synergies should be created.
- Yongin is the best choice in terms of avoiding geopolitical risk related to the U.S. and China.
- Yongin’s proximity within the Seoul Metropolitan Area will allow for easier business transactions with material/parts/equipment vendors and workforce retention.
Capex to result in sharper competitive edge for foundries, reinforcement of material/parts/ equipment supply chain.