In a critical period when the global semiconductor industry is accelerating its restructuring, South Korea’s semiconductor industry is facing unprecedented opportunities and challenges. As the dominant players in the global memory market, Samsung Electronics and SK Hynix have long occupied more than 70% of the global DRAM market. However, with the rapid changes in the geopolitical landscape, the accelerated pace of technological innovation, and the continued adjustment of global trade policies, the competitive advantage of South Korea’s semiconductor industry is undergoing severe tests. Multiple factors such as the “Chip Quad Alliance” promoted by the United States, Japan’s material export controls, and the rapid rise of the Chinese market have made the future development of South Korea’s semiconductor industry full of variables. Based on the Asia-Pacific perspective, this article uses scenario planning methods to systematically analyze the impact of the three core variables of global competition, technological change, and trade policy on the Korean semiconductor industry, predicting the possible development path from 2024 to 2030, and providing information for industry decision-makers and overseas companies. Provide strategic reference. Under the unprecedented changes in a century, an in-depth analysis of the transformation path of South Korea’s semiconductor industry will not only help grasp the development context of the global semiconductor industry, but also provide important inspiration for the strategic layout of various countries in the new round of industrial competition.

Fundamental Analysis of South Korea’s Semiconductor Industry

After more than 40 years of development, South Korea’s semiconductor industry has become an indispensable and important force in the global semiconductor industry. As of the third quarter of 2024, South Korea’s share of the global semiconductor market has stabilized at 16.8%, second only to the United States, and accounts for 44% of the global market share in the memory segment. This achievement is inseparable from South Korea’s continuous efforts in building industrial strength and accumulating strategic resources.

From the perspective of industrial strength, South Korea’s semiconductor industry shows distinct “strong polarization” characteristics. As twin companies, Samsung Electronics and SK Hynix account for 72.3% of the global DRAM market and 45.6% of the NAND Flash market. Based on McKinsey’s latest global semiconductor enterprise competitiveness assessment model, Samsung Electronics received scores of more than 90 points in the three dimensions of manufacturing process, R&D investment, and production capacity scale. Especially in the field of advanced processes, Samsung Electronics has achieved mass production of 3nm processes, which is comparable to TSMC is in the same echelon.

In terms of the integrity of the industrial chain, South Korea has formed a complete industrial system with memory as the core, covering design, manufacturing, packaging and testing. However, it is worth noting that in the fields of semiconductor equipment and key materials, South Korea’s self-sufficiency rate is still low and it is highly dependent on the United States and Japan. According to the latest assessment by the Korea Industrial Research Institute (KIET), the localization rate of South Korea’s semiconductor industry chain is 72%, of which the self-sufficiency rate in key links such as high-end photolithography machines, photoresists, and wafer materials is less than 30%, which constitutes the industry’s Potential vulnerabilities of the chain.

In terms of strategic resource endowment, South Korea shows unique advantages. Patent data shows that South Korea has ranked first in the world in the number of patent applications in the memory field for five consecutive years. Samsung Electronics alone has more than 95,000 semiconductor-related patents, 70% of which are core patents. In emerging technology fields such as 3D NAND, DDR5, and HBM, Korean companies have an absolute advantage in patent layout.

The structure of human resources shows a high degree of specialization. According to statistics from the Korea Semiconductor Industry Association, as of the beginning of 2024, the number of direct employees in the Korean semiconductor industry has reached 176,000, of which more than 45% have a master’s degree or above, and 12% have doctoral degrees. It is worth noting that South Korea has established a talent training system that deeply integrates industry, academia and research, and supplies more than 8,000 professional talents to the industry every year.

In terms of industrial supporting capabilities, South Korea has built a semiconductor industry cluster with Hwaseong and Pyeongtaek in Gyeonggi Province as the core. These industrial clusters not only have complete infrastructure, but also form an efficient industrial collaboration network. Especially in Cheongju, Cheonan and other places, South Korea is building a new generation of semiconductor manufacturing bases, which are expected to attract more than 300 supporting companies to settle in by 2025, further enhancing the industrial cluster effect.

However, it should also be noted that there are structural imbalances in the Korean semiconductor industry. The memory business accounts for an excessively high proportion (more than 60%), while its competitiveness in non-memory fields such as logic chips and analog chips is relatively weak. This industrial structure makes the Korean semiconductor industry more sensitive to cyclical fluctuations in the memory market, increasing the uncertainty of development.

Through a systematic analysis of the fundamentals of South Korea’s semiconductor industry, it can be found that South Korea’s leading advantages in the memory field, complete industrial system, strong patent reserves and high-quality talent team constitute its core competitiveness. However, there are still challenges in terms of independent controllability of the industrial chain and balanced industrial structure. These factors will profoundly affect the future development trajectory of South Korea’s semiconductor industry.

In-depth analysis of the global competitive landscape

The global semiconductor industry is currently undergoing the most intense period of post-war reconstruction. Major economies are competing for layout, and the competitive landscape is multi-polar and complex. This change has a profound impact on the development path of South Korea’s semiconductor industry.

2.1 Evolution of competitive situation

The United States’ strategic intention to reshape the global semiconductor supply chain through the “Chip Act” has become apparent. Intel is actively expanding its wafer fabs and plans to invest US$100 billion by 2025 to return to the manufacturing field; TSMC, Samsung, SK Hynix and other companies have successively deployed advanced process production capacity in the United States. This “America First” restructuring of the supply chain is changing the geographical distribution pattern of the global semiconductor industry.

Taiwan’s dominant position in the OEM field continues to strengthen. Relying on the yield advantage of 3nm process, TSMC has achieved more than 90% market share in high-end process. However, challenges such as geopolitical risks, rising costs, and brain drain are also becoming increasingly prominent. Especially under the framework of the US “Chip Quad Alliance”, Taiwan’s foundry advantage is facing squeeze from many parties.

Japan’s dominance in the field of semiconductor materials remains stable. In 2024, Japanese companies’ global market share in 12 key material fields such as photoresists, targets, and silicon wafers will exceed 50%. By imposing export controls on South Korea, Japan has further strengthened its voice in the upper reaches of the industrial chain. However, it is worth noting that South Korea is accelerating the localization process of materials, which may change the current dependence pattern.

The rapid rise of the Chinese market has become an important variable changing the competitive landscape. China’s semiconductor industry has achieved breakthroughs in the fields of memory and foundry, and the technical capabilities of enterprises such as Yangtze Memory and SMIC have significantly improved. It is expected that by 2025, China will become the world’s largest semiconductor production base, which will be both a challenge and an opportunity for Korean companies.

Europe strives to revive the semiconductor industry through the “2030 Digital Compass” plan. Companies such as Infineon and STMicroelectronics maintain their advantages in market segments such as power devices and automotive-grade chips. However, in the field of advanced processes, the gap between Europe and South Korea is still widening.

2.2 Changes in South Korea’s competitive advantages

South Korea’s dominance in the memory market has loosened. The DRAM market share will drop from 75.3% in 2020 to 72.3% in 2024, and the NAND Flash market share will also decline slightly. This change is mainly due to the catching up of Chinese enterprises and the transformation of the market demand structure.

In the field of manufacturing technology, the competition between South Korea and TSMC has shown a trend of ebb and flow. After Samsung Electronics mass-produced the 3nm GAA process, the process generation gap with TSMC has narrowed to 3-6 months. However, there are still gaps in yield and cost control, which directly affects the competitiveness of Korean companies in the foundry market.

Cost structure analysis shows that Korean semiconductor companies are facing rising cost pressure. Labor costs have increased by an average of 8.5% annually, and energy costs have increased by 12.3%. Coupled with huge R&D investments, the overall profit margin has been under pressure. In contrast, Taiwanese companies rely on mature industrial clusters and have obvious advantages in cost control.

The evaluation of innovation capabilities shows the characteristics of “coexistence of strong and weak”. South Korea maintains its innovation advantages in areas such as memory architecture and advanced packaging, but its innovation capabilities in basic areas such as EDA tools and IP cores are relatively weak. According to statistics, South Korea’s semiconductor-related R&D investment will reach US$34.2 billion in 2024, but the conversion efficiency needs to be improved.

2.3 Future competition focus

Competition for advanced manufacturing processes will enter a fierce stage. The R&D competition for 2nm and 1.4nm processes is in full swing, and South Korea plans to take the lead in achieving mass production of 2nm processes in 2025. However, TSMC and Intel have successively announced similar plans, and a three-legged competition pattern has begun to emerge.

Competition in specialty craftsmanship shows a trend of differentiation. Korean companies are strengthening their advantages in specialty process fields such as HBM (high-bandwidth memory) and CIS (image sensor). Although these areas are relatively small in scale, they have high profit margins and significant strategic value.

Competition in the application market is becoming increasingly fierce. As the demand for computing power brought by emerging applications such as AI, autonomous driving, and the Metaverse explodes, Korean companies are accelerating the deployment of new products such as computational memories and neural network processors. However, in these emerging markets, South Korea faces strong competition from American and Chinese companies.

To sum up, the global semiconductor competition landscape is undergoing profound changes. Although the Korean semiconductor industry maintains its overall competitive advantage, it faces challenges in multiple dimensions. In the future, the focus of competition will revolve around advanced manufacturing processes, specialty technologies and emerging applications, which requires Korean companies to further optimize their strategic layout and enhance their core competitiveness.

Technological change trends and impacts

Semiconductor technology is ushering in a new round of revolutionary breakthroughs. From process processes to architectural innovation, and from traditional computing to new computing paradigms, technological changes are reshaping the direction of industrial development. South Korea’s semiconductor industry faces both major opportunities and unprecedented challenges in this technological change.

3.1 Key technological breakthrough points

In the field of advanced processes, the evolution path of processes below 3nm has been clear. Samsung Electronics took the lead in adopting the GAA (Gate All Around) architecture and achieved breakthroughs in reducing leakage current and improving performance. According to its technology roadmap, it will achieve mass production of the 2nm process in 2025 and advance to the 1.4nm node in 2027. It is worth noting that in key aspects such as ultra-low threshold voltage control and multiple exposure technology, South Korea has mastered a number of core technologies with independent intellectual property rights, which has laid the foundation for process evolution in the post-Moore era.

The development of memory technology shows a diversified trend. South Korea has invested heavily in the research and development of new memory technologies, especially in areas such as Computing Integrated Storage (CIM), Magnetic Random Access Memory (MRAM), and Phase Change Memory (PCM). SK Hynix has successfully developed the breakthrough PIM (Processing-In-Memory) architecture, which integrates storage and computing functions, effectively solving the bandwidth bottleneck problem of the von Neumann architecture.

Innovation in advanced packaging technology is accelerating. Samsung Electronics pioneered the X-Cube technology, which achieves ultra-high-density 3D packaging through a hybrid bonding process, increasing inter-chip communication bandwidth by more than 300%. In technological fields such as fan-out wafer-level packaging (FOWLP) and through-silicon vias (TSV), Korean companies also maintain technological leadership. Especially in terms of memory stacking technology, mass production of 176-layer 3D NAND has been achieved, and it is planned to exceed 300 layers in 2025.

In terms of AI chip architecture innovation, South Korea is shifting from a follower to a leader. The NPU (Neural Network Processor) architecture developed by Samsung has reached the industry-leading level in terms of energy efficiency ratio. By integrating innovative designs such as tensor accelerators and sparse computing units, AI reasoning performance is improved by more than 5 times compared with traditional architectures, while energy consumption is reduced by 60%.

3.2 Impact of disruptive technologies

The rapid development of quantum computing technology poses potential challenges to the traditional semiconductor industry. The Korea Advanced Institute of Science and Technology (KAIST) has made breakthroughs in basic research fields such as superconducting qubits and quantum error correction. Samsung and SK have also successively established quantum computing research departments and invested more than 5 billion US dollars in laying out next-generation computing technology. However, the development of quantum computing may also cause the existing cryptography system to fail, which poses new challenges to memory security.

Photonic computing technology shows great potential. South Korea has deep accumulation in the fields of silicon photonics integration and optical interconnection. Samsung Advanced Institute of Technology is developing photon-based neuromorphic computing chips that are expected to achieve revolutionary breakthroughs in large-scale parallel computing at the data center level. It is expected that by 2027, photoelectric hybrid computing will be commercialized in specific application scenarios.

Research on brain-inspired computing is in the ascendant. The Korea Brain Research Institute (KBRI) has cooperated with semiconductor companies to make key progress in neuromorphic chip design and synaptic plasticity simulation. The brain-inspired memory developed by SK Hynix is ​​significantly better than traditional CMOS devices in terms of power consumption and learning ability, opening up a new path for the innovation of AI accelerators.

3.3 Technological innovation path

South Korea has built a unique industry-university-research collaborative innovation system. With the “Semiconductor Design Education Center” (IDEC) as the core, it unites 28 key universities and 5 national research institutes across the country to form a complete innovation chain covering basic research, process development, and industrial application. The “K-Semiconductor Belt” plan launched in 2024 further strengthens the construction of the innovation ecosystem.

The transnational technical cooperation network continues to expand. Korean companies have deeply connected with global innovation resources through strategic investment, technology licensing, joint research and development and other methods. Especially in cutting-edge fields such as EUV lithography and atomic-level epitaxy, it has established a stable cooperation mechanism with ASML of the Netherlands and Applied Materials of the United States. At the same time, South Korea is also actively promoting technological cooperation with emerging market countries and building a multi-level innovation network.

The allocation of innovation resources continues to be optimized. The South Korean government plans to invest more than US$100 billion to support semiconductor technology innovation from 2025 to 2030, focusing on strategic areas such as cutting-edge materials, extreme ultraviolet lithography, and third-generation semiconductors. At the same time, social capital is guided to participate in technological innovation through policy tools such as tax incentives and talent introduction. It is particularly worth mentioning that South Korea is building the world’s largest semiconductor R&D cluster, integrating upstream and downstream innovation resources in the industry chain, and creating a world-class technological innovation highland.

Technological changes are reshaping the competitive landscape of the semiconductor industry. Korean companies need to maintain their advantages in memory technology while accelerating the deployment of emerging computing technologies and building a more resilient technological innovation system. Only by deepening international cooperation, optimizing resource allocation, and continuously improving technological innovation capabilities can we maintain competitive advantages in the new round of industrial change.

Analysis of trade policy environment

The global semiconductor industry is facing a complex trade policy environment, and geopolitical factors have profoundly affected the development trajectory of the industry. As an important participant in the global semiconductor industry, South Korea needs to find a strategic balance in complex international relations.

4.1 Changes in global trade pattern

The United States is increasingly reshaping the global semiconductor trade order through export controls. The upgraded “Chip Export Control Regulations” in 2024 further tightened export restrictions on advanced process equipment, EDA tools and related technologies. This has a profound impact on the overseas business of Korean semiconductor companies, especially in terms of technical cooperation and market expansion in the field of advanced processes below 14nm. According to analysis by industry research institutions, these control measures may lead to a reduction of approximately 15% in exports by Korean semiconductor companies in 2025.

The European Union has restructured its industrial policy framework through the European Chip Act and plans to increase Europe’s share of global semiconductor production capacity to 20% by 2030. This industrial policy adjustment directly affects the layout strategy of Korean companies in the European market. Especially in subdivided fields such as automotive electronics and industrial control, Korean companies face greater competitive pressure from local European companies. At the same time, the EU’s strengthened concept of technological sovereignty has also brought new policy barriers to Korean companies.

Regional trade agreements show a trend of fragmentation. The implementation of RCEP (Regional Comprehensive Economic Partnership Agreement) provides new opportunities for the Korean semiconductor industry to explore the Asia-Pacific market. However, the advancement of the US-led “Chip 4” and the “Indo-Pacific Economic Framework” (IPEF) has brought new uncertainties to regional economic integration. South Korea needs to find a balance among multiple overlapping trade frameworks.

4.2 Impact on bilateral relations

The South Korea-US semiconductor alliance has entered a deepening period. As Samsung Electronics and SK Hynix invest and build factories in the United States, the strategic synergy between the two countries in the semiconductor field continues to strengthen. The “Korea-US Semiconductor Partnership Agreement” signed in 2024 further deepens cooperation between the two parties in areas such as talent training, technology research and development, and supply chain security. But this close relationship may also limit the strategic autonomy of Korean companies.

Although the materials dispute between South Korea and Japan has eased, hidden worries still exist. Japan’s export controls on semiconductor materials, which were implemented in 2019, have pushed South Korea to accelerate the localization process of materials. At present, South Korea’s photoresist self-sufficiency rate has increased to 45%, but it is still highly dependent on Japan in the field of key materials such as high-purity hydrogen fluoride. Although the “export whitelist” reciprocal agreement reached by the two countries has eased trade frictions, the issue of supply chain vulnerability still needs to be resolved.

The strategic cooperation between South Korea and China has taken on new characteristics. China’s status as South Korea’s largest export market for semiconductors continues to consolidate, and bilateral semiconductor trade volume will exceed US$100 billion in 2024. However, under the background of U.S. technology control, Korean companies are facing new challenges in their business in China. Especially in the memory field, with the rise of local Chinese companies, the market share of Korean companies is under pressure. To this end, South Korea is exploring differentiated cooperation models, focusing on areas such as specialty processes and packaging and testing.

The industrial interaction between South Korea and Taiwan is becoming increasingly subtle. TSMC’s dominant position in the field of advanced processes has put pressure on Korean companies, but the two sides have maintained pragmatic cooperation in aspects such as patent cross-licensing and the formulation of technical standards. Especially in emerging fields such as advanced packaging and heterogeneous integration, Korean and Taiwanese companies are exploring cooperation models with complementary advantages.

4.3 Trade policy responses

The supply chain localization strategy is fully rolled out. The Korean government launched the “K-Semiconductor Strategy 2.0” and plans to invest 1.5 trillion won to support the localization of key materials and core equipment. By 2025, it plans to increase the local supply capacity of 12 strategic categories to more than 70%. At the same time, we will build a more resilient local supply chain system by cultivating small and medium-sized suppliers and improving industrial supporting facilities.

International cooperation models continue to innovate. South Korea is exploring a new cooperation model of “technology alliance + production capacity sharing”. For example, the extreme ultraviolet lithography technology cooperation center established with ASML of the Netherlands not only ensures the supply of equipment, but also achieves technology accumulation. In areas such as talent exchange, standard setting, and intellectual property protection, South Korea is also building a multi-level international cooperation network.

The trade risk hedging mechanism continues to improve. Korean companies have enhanced their ability to adapt to changes in trade policies through measures such as production capacity decentralization, supplier diversification, and inventory optimization. At the same time, the government has established a semiconductor trade early warning system to promptly identify potential risks through big data analysis to provide support for corporate decision-making. Especially in sensitive areas such as intellectual property protection and technology export control, special risk assessment and response mechanisms have been established.

Facing the complex and ever-changing trade policy environment, South Korea’s semiconductor industry needs to find a balance between maintaining industrial security and seizing market opportunities. By improving the risk prevention system, innovating cooperation models, and optimizing the supply chain layout, we will build a more resilient and competitive development pattern. This is not only related to the future of South Korea’s semiconductor industry, but will also affect the development trend of the global semiconductor industry.

Multi-scenario development path prediction

Based on the current industry situation and future development variables, South Korea’s semiconductor industry may present three typical development scenarios in the next five years. Each scenario represents a different strategic choice and development path, which will have a profound impact on the industrial landscape.

Scenario 1: Technology-led (positive scenario)

Under this positive scenario, South Korea’s semiconductor industry is expected to achieve leapfrog development. The triggering condition is the superposition of multiple positive factors: first, breakthrough progress in key technical fields such as GAA process and memory architecture; second, the government continues to increase financial support, and annual R&D investment is expected to account for more than 5% of GDP; third, Emerging application markets are expanding rapidly, especially the incremental demand brought by fields such as the Metaverse and autonomous driving.

In this case, industrial development will be dominated by independent innovation. Samsung Electronics is expected to achieve mass production of the 2nm process by 2026 and maintain its global leadership in the memory field. SK hynix will also achieve breakthroughs in innovation in new storage architecture, AI accelerator and other fields. It is expected that by 2028, South Korea’s share of the global semiconductor market will increase to more than 35%.

Industrial upgrading will take on a multi-dimensional trend. On the one hand, through product structure optimization, we will increase the proportion of high value-added products such as system-level chips and analog devices; on the other hand, we will accelerate our expansion into high-end links such as design services and IP licensing. At the same time, it promotes the transformation of traditional foundry manufacturing into “intelligent manufacturing + customized services” to create differentiated competitive advantages.

The market landscape will undergo significant changes. The dominant position of Korean companies in the memory market will be further consolidated, and the market share is expected to exceed 70%. In the field of logic chips, it is expected to occupy more than 15% of the global share, especially in mobile processors, automotive electronics and other market segments.

Scenario 2: Win-win cooperation (balanced scenario)

The balanced scenario is characterized by regional collaboration and moderate competition. The triggering conditions include: the deepening implementation of regional trade agreements, the rationalization of industrial policies in various countries, and the moderate relaxation of technical barriers. In this context, international cooperation will become an important link for industrial development.

The development path will focus more on synergy. Korean companies may carry out in-depth cooperation with global partners through technology licensing, joint research and development, production capacity sharing and other methods. It is expected that by 2027, cross-border technical cooperation projects will increase by more than 50%, and the number of international patent applications will increase by an average of 20% annually.

The reconstruction of the industrial chain will present new characteristics. Korean companies may moderately transfer some of their mid- to low-end production capacity to emerging markets such as Southeast Asia while maintaining their core competitiveness. At the same time, through investment, mergers, strategic alliances, etc., we will strengthen short areas such as design tools and special equipment to build a more complete industrial system.

The competitive landscape will become diversified. The memory market may form a tripartite situation between Korean, Japanese and Chinese companies, but Korean companies will still maintain a market share of 45-50%. In the field of specialized chips, Korean companies are expected to dominate specific market segments through differentiated competition.

Scenario 3: Defensive contraction (conservative scenario)

As trade frictions intensify and technology blockades tighten, industries may turn to defensive development strategies. The main triggers for this conservative scenario include: intensified disruptions in the global industrial chain, expansion of technology export controls, and disruptions in the supply of key materials.

The development path will focus on risk management and control. Companies may scale back overseas investments and concentrate resources on areas where they already have advantages. It is expected that by 2026, overseas direct investment may decrease by 30%, and R&D investment will focus more on traditional areas of advantage such as memory.

Strategic adjustments will be reflected at multiple levels. The first is to accelerate the localization of the supply chain and improve the self-sufficiency rate of key materials and equipment; the second is to strengthen the protection of intellectual property rights and reduce technology spillover; the third is to optimize the customer structure and reduce dependence on a single market.

There may be structural changes in market share. In the memory market, the share of Korean companies may drop to 55-60%; in the field of logic chips, market development plans may be delayed or reduced in scale. However, it will still maintain its competitive advantage in some high-end market segments.

For different development scenarios, the Korean semiconductor industry needs to formulate corresponding strategic combinations. Under a positive scenario, investment in innovation should be increased to seize the technological commanding heights; under a balanced scenario, cooperation models need to be optimized to achieve mutual benefit and win-win results; under a conservative scenario, risk prevention should be emphasized to ensure sustainable development. Enhancing the adaptability and resilience of industrial development through scenario analysis and forward-looking layout is of great significance to maintaining South Korea’s strategic position in the global semiconductor industry.

Strategic layout suggestions

Based on the current status of the industry and future development trends, the Korean semiconductor industry needs to build a systematic strategic framework in the three dimensions of technological innovation, industrial upgrading and risk prevention to cope with increasingly fierce global competition.

6.1Technological innovation strategy

The precise identification of key breakthrough areas is the primary task of technological innovation. According to the analysis of the industrial technology roadmap, the Korean semiconductor industry should focus on five major technology areas in the next three years: the first is advanced process technology in the post-Moore era, especially the development of GAA architecture for processes below 2nm; the second is new memory technology, including computing Frontier directions such as storage integration and memristor; the third is heterogeneous integration technology, focusing on breakthroughs in key links such as 3D packaging and through-silicon via interconnection; the fourth is the third generation of semiconductor material technology, accelerating the development of silicon carbide and gallium nitride Device industrialization; fifth is dedicated chip design technology for emerging application scenarios such as AI acceleration and autonomous driving.

The optimal allocation of R&D investment requires the establishment of a more scientific evaluation system. It is recommended to adopt a “stratified + closed-loop management” model: the proportion of investment in basic research should be maintained at around 30%, focusing on supporting forward-looking technology exploration; the proportion of investment in application development should be increased to 50% to accelerate the process of technology industrialization; investment in industrialization verification Accounting for 20%, ensuring rapid transformation of innovation results. At the same time, a quarterly evaluation mechanism is established to dynamically adjust resource allocation based on R&D progress.

The layout of international cooperation should adopt the strategy of “open collaboration + independent controllability”. On the one hand, it deepens technical cooperation with leading global institutions through the establishment of joint laboratories and innovation alliances; on the other hand, it insists on independent innovation in core technology areas and avoids over-reliance on external technology authorization. Especially in strategic fields such as EUV lithography and high-end materials, a complete independent innovation system needs to be built.

6.2 Industrial upgrade path

Vertical integration of the industrial chain is a key path to improving competitiveness. It is recommended to use the two-wheel drive of “endogenous development + external mergers and acquisitions”: extend upstream and focus on key material fields such as photoresist, target materials, and special gases. The goal is to increase the self-sufficiency rate of core materials to 60% by 2027; Expand downstream, strengthen in-depth binding with system manufacturers, and build overall service capabilities of “chip + solution”.

Horizontal business expansion requires seizing opportunities in emerging markets. It is recommended to focus on three major directions: the first is the new computing power market, developing special processors for AI training and edge computing; the second is the automotive electronics market, accelerating the construction of car-grade chip platforms; the third is the Internet of Things market, developing Low power consumption, high integration system-level chip. It is expected that by 2026, the revenue share of these emerging businesses will increase to more than 30%.

Business model innovation is an important support for industrial upgrading. It is recommended to promote three types of innovation: the first is the innovation of design service model, developing the light asset business of “chip IP + customized design”; the second is the innovation of manufacturing service model, promoting the intelligent manufacturing model of “flexible production line + customized process”; third It is an innovation of integrated service model to create a business ecosystem of “one-stop solution + continuous operation service”.

6.3 Risk prevention mechanism

Building supply chain resilience requires systematic planning. It is recommended to build a “3+3” resilience system: three dimensions (material supply, manufacturing capabilities, market channels) and triple guarantees (local supply, strategic inventory, alternatives). Especially in the field of critical materials, it is recommended to adopt the “1+2+1” model, that is, one main supplier, two alternative suppliers, and one emergency supplier to ensure supply chain security.

Diversification of technical routes is an effective means to reduce risks. It is recommended to simultaneously promote multiple technical routes in core technology fields: in the field of advanced processes, in addition to focusing on GAA technology, it is also necessary to reserve other new device technologies; in the field of memory, it is necessary to develop DRAM, NAND Flash, and new memory technologies in parallel; in packaging technology In this field, multiple solutions such as 2.5D, 3D, and fan-out need to be laid out at the same time. Although this diversification strategy will increase R&D costs, it can effectively reduce the risk of technology route lock-in.

The decentralization of market layout requires more flexible strategies. It is recommended to adopt a three-tier layout of “core markets + emerging markets + strategic markets”: core markets (such as the United States, China, and the European Union) maintain a stable share, accounting for 60% of total revenue; emerging markets (such as Southeast Asia, India) accelerate penetration and increase to 30%; seeking breakthroughs in strategic markets (such as the Middle East and South America), reaching 10%. At the same time, differentiated competition strategies and risk control measures are adopted based on different market characteristics.

In order to ensure the effective implementation of the strategy, it is recommended to establish a cross-departmental strategic coordination committee to regularly evaluate the implementation of the strategy and adjust specific measures in a timely manner. At the same time, a strategic early warning mechanism is established to remain highly sensitive to changes in the external environment and ensure the forward-looking and adaptability of the strategic layout. Through systematic strategic planning and strict implementation supervision, the Korean semiconductor industry will be promoted to achieve high-quality and sustainable development.

Corporate strategic opportunities

Facing the profound changes in the global semiconductor industry landscape, companies need to accurately seize strategic opportunities, formulate systematic response plans in the three dimensions of cooperation, competition, and risk management and control, and build sustainable competitive advantages.

7.1 Cooperation space analysis

Opportunities for technical cooperation are diversified. According to the analysis of technology development trends and market demand, there will be four key areas of cooperation in the next three years: first, the development of advanced processes, especially joint research and development in EUV lithography technology and multi-patterning technology for 2nm and below processes; second, new Packaging technology, including technological collaboration in cutting-edge directions such as chiplet architecture and heterogeneous integration; the third is characteristic process development, focusing on process optimization in power devices, radio frequency devices and other subdivisions; the fourth is design tool chain construction, including EDA tools Construction of basic capabilities such as localization and IP reuse system.

Industrial chain collaboration shows a trend of vertical deepening. It is recommended to promote collaboration at three levels: in the upstream link, focus on strengthening strategic cooperation with material and equipment suppliers, and speed up the research and development process of key materials and equipment through joint development, technical feedback, etc.; in the midstream link, strengthen collaboration between design companies and manufacturing companies , promote “design-manufacturing-packaging-testing” integrated solutions; downstream links deepen cooperation with terminal application manufacturers to promote early chip introduction and joint optimization.

Market complementarity analysis needs to be based on a global perspective. It is recommended to build a “three-in-one” cooperation framework: in mature markets (such as Europe, the United States, Japan and South Korea), focus on the joint development and market promotion of high-end products; in emerging markets (such as Southeast Asia, India), focus on the cooperative development of localized solutions; In cutting-edge markets (such as AI, automotive electronics), we will jointly explore emerging application areas through joint investment and technology sharing.

7.2 Competitive strategy formulation

Differentiated competitive strategies require precise positioning. It is recommended that enterprises choose the “three highs and one special” strategic route based on their own advantages: high-performance route, focusing on developing industry-leading flagship products; high-quality route, with reliability and consistency as core competitiveness; high-efficiency route, through intelligent Manufacturing improves production efficiency; characteristic routes create unique advantages in segmented fields. It is expected that through differentiation strategy, the company’s gross profit margin can be increased by 3-5 percentage points.

The path to technological catch-up should adopt a “leap-forward” development model. It is recommended to implement a “two-wheel drive + one support” strategy: on the one hand, achieve technological breakthroughs in key areas through independent research and development; on the other hand, quickly acquire key technologies and talents through mergers and acquisitions; at the same time, establish an industry-university-research innovation alliance to provide technology catch-up. Sustained motivation. The key is to choose the right technical entry point and avoid simple “follower” strategies.

Market penetration plans need to be tailored to local conditions. It is recommended to adopt a “multi-level + full coverage” penetration strategy: the first level is to deeply cultivate the core market and increase market share through product upgrades and service innovations; the second level is to develop emerging markets and expand the market through localization strategies and channel construction. Coverage; the third layer is breakthrough in market segments, occupying specific application fields through professional solutions.

7.3 Risk management and control suggestions

Responding to technological blockade requires the establishment of multiple lines of defense. It is recommended to build a “three-in-one” technology defense system: first, technology reserves, ensuring the independent controllability of key technologies through forward-looking research and development; second, alternatives, laying out alternative technology routes in advance for technical fields that may be blocked; and finally, technology Cooperation network reduces the risk of dependence on a single source of technology through diversified international cooperation.

Trade compliance management must be prepared for rainy days. It is recommended to establish a three-tier management system of “early warning + response + optimization”: establish a trade risk early warning mechanism to maintain a high degree of vigilance against potential trade restrictions; formulate emergency response plans to ensure rapid adjustment when trade policies change; optimize customer structure and supply chain layout to reduce dependence on a single market. At the same time, we strengthen compliance training and improve employees’ compliance awareness.

Intellectual property protection requires an all-round layout. It is recommended to strengthen protection from four dimensions: in terms of patent layout, strengthen patent application and maintenance of core technologies and build a complete patent protection network; in terms of trade secret protection, improve the confidentiality system and strengthen information security management; in terms of technology output control, establish strict Technology transfer review mechanism; in terms of dispute resolution, a professional intellectual property team is established to improve dispute resolution capabilities.

To ensure that strategic opportunities are effectively grasped, companies should establish a closed-loop management mechanism for strategy implementation. Regularly evaluate the effectiveness of cooperation, competition situation and risk status, and adjust strategic measures in a timely manner. At the same time, it is necessary to strengthen internal coordination to ensure that various functional departments form synergy to jointly promote the implementation of the strategy. Through systematic strategic planning and strict implementation supervision, we help enterprises seize opportunities in changing situations and achieve high-quality development. It is recommended to establish a quarterly strategic evaluation mechanism, led by senior leaders, to ensure the timeliness and effectiveness of strategy implementation.

Key nodes for future development

In the context of rapid iteration in the semiconductor industry, accurately grasping the time window of key nodes is crucial to corporate strategy formulation. Based on the current industrial development trend, systematic prediction and analysis of important time nodes in the next three to five years are carried out.

8.1 Technology breakthrough time

The evolution of advanced process nodes will be accelerated. It is expected that in 2025, the 3nm process will achieve large-scale mass production, with a stable yield rate of more than 85%; in 2026, the 2nm process technology will complete research and development verification, adopting a full gate surround (GAA) architecture; in 2027, 1.4 in the post-Moore era The nm technology platform will achieve key breakthroughs, including innovations such as new channel materials and three-dimensional transistor structures. At the same time, EUV lithography technology will make breakthroughs in the direction of high numerical aperture (High-NA) to support finer pattern manufacturing.

Breakthroughs in new memory technologies will reshape the industry landscape. 2025 is a key turning point, and magnetoresistive random access memory (MRAM) is expected to achieve large-scale application in the Internet of Things and automotive electronics; in 2026, phase change memory (PCM) technology will show its advantages in storage and computing integration scenarios; by 2027, The new memristor promises to be a breakthrough in neuromorphic computing. These technological innovations will bring about fundamental changes in storage architecture.

Characteristic process innovation will go through three key stages. 2025 is the first year of industrialization of the third generation of semiconductor materials. Silicon carbide (SiC) and gallium nitride (GaN) devices will achieve important breakthroughs in the fields of new energy vehicles and fast charging; in 2026, silicon-based optoelectronics technology will be used in data The field of central interconnection has formed large-scale applications; in 2027, radio frequency front-end technology will adapt to the needs of 6G communication, including breakthroughs in new frequency band devices such as millimeter waves and terahertz.

8.2 Policy change window period

Trade policy adjustments will show phased characteristics. The first quarter of 2025 is an important observation period, and there may be a new round of adjustments to global semiconductor trade rules, especially in aspects such as technology export controls and key equipment transfers; in mid-2026, regional trade agreements will enter an intensive negotiation period, which may form A new multilateral cooperation mechanism; in 2027, the reconstruction of the global supply chain will enter a critical period, and a coordination mechanism for localization policies of various countries is expected to be established.

Industrial policy changes will undergo an important turning point. In the second half of 2025, the world’s major semiconductor producing countries will complete the formulation of a new round of industrial support policies, focusing on technological innovation, production capacity layout and talent training; in 2026, carbon neutrality-related policies will have a substantial impact on the semiconductor manufacturing industry , green manufacturing will become a mandatory requirement; in 2027, the digital economy governance framework will be more complete, and new regulatory rules will be introduced in areas such as data security and computing infrastructure.

Updates to international agreements will have far-reaching consequences. In 2025, the Wassenaar Agreement may undergo a new round of revisions, involving the control scope of advanced semiconductor technology; in 2026, the global semiconductor standardization organization will release a new generation of technical standards, including advanced packaging, chip interconnection and other key areas; in 2027 , the international intellectual property protection framework will usher in important changes, and the patent protection mechanism in the semiconductor field will be more complete.

8.3 Rhythm of market structure evolution

The change in demand structure will go through three key periods. 2025 is a period of explosive demand for AI computing, and the demand for high-performance chips in data centers and edge computing will grow rapidly; in 2026, automotive electronics will enter a new generation upgrade cycle, and autonomous driving and smart cockpits will drive the optimization of the chip demand structure; in 2027 , Metaverse-related applications will take shape, and the demand for specialized chips such as graphics processing and sensors will increase significantly.

The transformation of the competitive situation will show obvious phased characteristics. In 2025, the global semiconductor production capacity pattern will complete phased adjustments, and new production capacities will be put into operation one after another; in 2026, the vertical integration of the industrial chain will enter its peak period, and new competitive entities will be formed through mergers and acquisitions; in 2027, professional division of labor and platform integration will will coexist and develop to form a more diversified competitive landscape.

The rise of emerging markets will proceed at a specific pace. In 2025, the Indian semiconductor industry will enter a period of substantial development, with packaging and testing and other links taking the lead in breakthroughs; in 2026, the Southeast Asian market will form a regional industrial cluster, forming a competitive advantage in the fields of specialty processes and packaging; in 2027, the Middle East will develop in specific fields (such as compound semiconductors and optoelectronic devices) will achieve breakthroughs and form new growth poles.

In order to effectively respond to the opportunities and challenges brought by these key nodes, it is recommended that enterprises establish a dynamic tracking mechanism, regularly evaluate the evolution of development nodes, and adjust strategic deployments in a timely manner. At the same time, it is necessary to strengthen forward-looking research, plan key breakthrough directions in advance, and ensure that opportunities are seized in critical time windows. It is recommended to set up a special strategic research team and establish a monthly research and judgment mechanism to ensure accurate grasp and rapid response to key nodes.