Samsung on Wednesday unveiled their plan to invest $230 billion over the next 20 years in a new semiconductor production mega cluster in South Korea. The country's government believes that the new chip manufacturing site and the expansion of existing fabs will make South Korea the world's largest producer of chips, de-throning Taiwan.

"The mega cluster will be the key base of our semiconductor ecosystem," a statement by the South Korean government published by Nikkei reads. [The mega cluster will enable South Korea to] leap forward as a leading country amid fierce global competition over advanced industries."

Samsung's new campus will be located near Yongin, Gyeonggi Province, and will house five advanced fabs. Some of the fabs will be used to produce logic chips for Samsung Foundry's customers, and others will focus on making various types of memory. Samsung plans to invest some $230 billion in its new site in exchange for tax breaks, subsidies, and other incentives from the government.

$230 billion is a huge pile of money, but it will be spent over a period of 20 years (i.e., $11.5 billion per year if spread equally) and on giant fabs that will use leading-edge fabrication technologies. These production facilities are set to adopt extreme ultraviolet (EUV) lithography scanners, which are extremely expensive. A current-generation ASML Twinscan NXE scanner with a 0.33 numerical aperture (NA) optics costs around $200 million, whereas a next-generation Twinscan EXE scanner with a 0.55 NA optics (High-NA) is expected to cost about $400 million. Every fab requires several cutting-edge scanners and thousands of other expensive tools to produce chips on leading-edge process technologies, so fabs are getting more costly and will be getting even more expensive in the coming years, so huge investment plans are set to become more common.

In addition to logic and memory chip production facilities, the new mega cluster will also house Samsung's semiconductor ecosystem partners, including suppliers of raw materials, parts, and even fabless chip designers, a total of 150 companies, reports Yonhap. Ecosystem partners tend to locate their facilities near large fab complexes to simplify logistics, but finding fabless chip developers in the fab campuses is something new. This might make a lot of sense since close collaboration between chip designers and chip producers at all stages may ensure higher performance and faster time-to-yield.

"The mega cluster will have the whole semiconductor value chain," the ministry said in a release. "The government will implement measures to become a global leader in the system semiconductor industry without a hitch in close cooperation with companies."

Interestingly, the South Korean government plans to nurture ten fabless firms with annual sales of over 1 trillion won ($761.4 million) by extending support for their prototype production, the Yonhap report reads, citing government officials. 

Samsung's $230 billion investment is a pivotal part of South Korea's plans to attract some $422 billion of private investments into such sectors as batteries, biotechnology, displays, electric vehicles, robots, and semiconductors over the next few decades.

"The economic war that began recently in semiconductors is broadening to advanced industries such as batteries and cars of the future," said Yoon Suk Yeol, president of South Korea, in a TV interview, reports Bloomberg. "Each country is sparing nothing in large-scale subsidies and tax benefits to build cutting-edge manufacturing facilities at home."

Indeed, China, Japan, the European Union, Taiwan, and the U.S. are all trying to advance emerging technologies and industries like AI, autonomous vehicles, high-performance computing, robotics, and renewable energy sources. Computer chips are crucial for all emerging technologies and industries, so Samsung's new mega cluster fab complex is vital for the company and the country.

Source: Bloomberg

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  • meacupla - Wednesday, March 15, 2023 - link

    The foundry size increase will help Samsung's endeavor of dethroning TSMC, but I don't think Samsung has the technical expertise at making high performance silicon.
    I think Samsung would need to achieve a technological breakthrough, because AMD, nVidia, and Apple are all sticking to TSMC for their high performance processors. If that's not enough evidence of how well Samsung fabricated chips perform.
  • tooltalk - Wednesday, March 15, 2023 - link

    Samsung just announced first GAAFET based 3nm last year with a plan to quadruple their capacity by 2026 -- what other technological breakthrough are you talking about?
  • meacupla - Thursday, March 16, 2023 - link

    You are aware that samsung process nodes are behind the performance curve, right?
    For example, Samsung 8nm used in RTX 3000 series were cheap to produce, but the only reason 3000 series lead in performance was because AMD didn't have anything to compete with.

    Their current 3nm GAAFET process is only used by Samsung themselves, and some ASIC miner chips. No one is ordering them.
    And you want me to believe this is a breakthrough product?
    If it was, Apple and nVidia would be all over it.
  • tooltalk - Thursday, March 16, 2023 - link

    You mean how nVidia is all over TSMC's overpriced 3nm?
  • qlum - Thursday, March 16, 2023 - link

    I don't think that is a good example of samsung's node being behind the performance curve. Samsung 8nm is just an older optimized 10nm node, yes they were behind tsmc which released it's 7nm a year earlier, but at the time the 3000 series entered production, they could have also opted for the samsung 7nm node.
  • Doug_S - Wednesday, March 15, 2023 - link

    This spending is a drop in the bucket. TSMC is spending $100 billion in just the next three years, and 100% of that is on logic fabs. Samsung's $230 billion over 20 years is on both logic and DRAM/NAND - and it is safe to assume the latter is getting the bulk of that spending.

    So it seems likely TSMC in three years will spend more on logic fabs than Samsung will spend in twenty. If anything TSMC is going to pull further ahead if Samsung spends so little!
  • tooltalk - Wednesday, March 15, 2023 - link

    Samsung's capex in 2021 was ~$35B vs $30B for TSMC. And pretty much every chipmaker, including TSMC, announced major cuts in production or capex, except Samsung.

    My understanding is that Samsung, after announcing $18B plant in Taylor, Texas last year, entertained investing further $120+B in the US, but now it looks like they are all going to South Korea.
  • ballsystemlord - Wednesday, March 15, 2023 - link

    30 years is a big prediction time frame. So samsung is probably just trying to get itself in the lime light again. While it's nodes falter and internal strife tear it apart.
  • ballsystemlord - Wednesday, March 15, 2023 - link

    Edit: 20 years.
    (Next time don't read the comments where they talk about 30 things before posting.)
  • tooltalk - Wednesday, March 15, 2023 - link

    never hurts to read the headline in entirety: "... $230B investment over 20 years."

    It's a sign that South Koreans are not buying into Biden's CHIPS ACT which now requires (excess) profit-sharing, trade-secret disclosure, and many other onerous terms.

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