According to Yonhap News,

(SEJONG = Yonhap News) The Korean government and major domestic semiconductor manufacturers unveiled their plan to develop generic semiconductor technologies.

The Ministry of Trade, Industry & Energy (MOTIE) signed a KRW 15 billion investment memorandum of understanding (MOU) on February 20 with five semiconductor companies – Samsung Electronics, SK Hynix Inc., AUROS Technology, NEXTIN and TES Co., Ltd. Under the MOU, the government and companies will jointly invest KRW 3 billion annually in the development of next-generation semiconductor technologies for the next five years.

The investment project is the second phase of the government’s project to develop cutting-edge technologies for the semiconductor industry. Its main focus is to foster semiconductor materials and measurement, inspection and manufacturing technologies, and the project is expected to positively influence the growth of the entire industry, according to MOTIE.

The first phase of the project was to invest a total of KRW 25 billion from 2013 to 2017 in the development of semiconductor materials, but the government significantly expanded the project scope in the second phase.

Unlike its first phase, which has been largely conglomerate-oriented, the project will be joined by small and medium-sized equipment companies, including AUROS Technology, the ministry pointed out.

Investment in the project will be split fifty-fifty between the government and companies.

Samsung Electronics and SK Hynix Inc. will invest KRW 750 million and KRW 500 million, respectively, and three other companies will inject KRW 100 million each. The total amount of investment this year is expected to reach KRW 8 billion.

Last year, the Korean semiconductor industry posted USD 57 billion in exports and topped the nation’s export market, overtaking the “unstoppable” Japan to become the second largest exporter in terms of global market share. However, the nation has shown weakness in developing the generic technology.

A crisis awareness throughout the industry holds that the recent decrease in medium- and long-term investment by large conglomerates has weakened the abilities of universities and research institutes to develop generic technologies.

The government decided to carry out the project to the effect that it will help the country develop generic technologies to localize the production of materials & devices and dominate the next-generation semiconductor market.

“As we can learn from Japan’s case, one cannot maintain a dominant position in the global market without acknowledging the importance of the development of innovative technologies,” said a MOTIE official. “We will further develop generic technologies to build a solid foundation for the semiconductor industry.”