2. Where Success Knows No Limits
Index
Korea
Where Success Knows No Limits
1. Status of Korea's Semiconductor Industry 3
2. Enhancement of Technological
Competitiveness 12
3. Status of Foreign Direct Investment 15
4. Government Policies and Incentives 18
Semiconductor

3. Status of Korea's Semiconductor Industry
Global market shares of major countries
Korea ranks second in the global semiconductor market, with 16.2% of the market share. However, Korea needs to diversify its product items, as there is a big gap between Korea and the world’s largest semiconductor producer, the USA.
Global semiconductor market shares by major country in 2013
Unit: %
Other,
Source: IHS (April, 2014) 3

4. Status of Korea's Semiconductor Industry
Changing market trends
Decreasing demand for PCs due to the advancement of smartphones is creating a paradigm shift in the industry of semiconductors, the core part of smartphones.
In the semiconductor market, DRAM, which used to be the industry’s flagship item, has been replaced by application processors (AP) and other system semiconductor solutions. AP
Nand Flash 4

5. Status of Korea's Semiconductor Industry
Market shares of global companies
Top 10 global semiconductor producers (2013)
2013
Company
Sales (USD 1 mn)
Market share (%) 1
Intel
46,981
14.8 2
Samsung
33,822
10.6 3
Qualcomm
17,212
5.4 4
Micron
14,121
4.4 5
SK Hynix
12,809
4.0 6
Toshiba
11,946
3.8 7 TI
11,420
3.6 8
Broadcom
8,179
2.6 9
STM
8,082
2.5 10
Renesas
7,971 5

6. Status of Korea's Semiconductor Industry
Global market shares of major countries
Korea’s market share of DRAM in 2013 was a whopping 63.1%
DRAM semiconductor market shares in 2013
Unit : %
Source: IHS (April, 2014) 6

7. Status of Korea's Semiconductor Industry
DRAM market share analysis
Samsung and SK Hynix secured 66% M/S of DRAM and 54% M/S of NAND in 2Q14
Samsung and SK Hynix lead the DRAM market with through silicon via (TSV), DDR4 technologies.
DRAM semiconductor market shares in 2013
Etc.
Unit : %
66% 7

8. Status of Korea's Semiconductor Industry
Global market shares of major countries
Korea’s market share of NAND flash memory was 47.2%.
NAND flash semiconductor market shares in 2013
Unit : %
Source: IHS (April, 2014) 8

9. Status of Korea's Semiconductor Industry
NAND market share analysis
In NAND, they have Triple Level Cell (TLC) and 3D NAND production know-how.
Most analysts expect our memory business to be fine in 2015.
NAND flash semiconductor market shares in 2013
Unit : %
54% 9

10. Status of Korea's Semiconductor Industry
Export and import trends of Korea
Imports and exports of Korea's semiconductor industry
Unit: USD 1 mn.
Export products
DRAM
NAND flash AP
Image sensors
Driver ICs
Import products
System semiconductors
Source: KITA.net 10

11. Status of Korea's Semiconductor Industry
Semiconductor industry cluster
An industrial semiconductor cluster has formed around Gyeonggi and Chungcheong provinces. Samsung Electronics and SK Hynix made large-scale investments every year in the metropolitan areas, which attracted SMEs to form an industrial cluster.
Chungcheong Province has been strategically forming semiconductor clusters, including the Cheonan Foreign Investment Zone, Ochang complex and Asan complex to attract both foreign and domestic companies.
A semiconductor town built in Pangyo New City, Gyeonggi Province is driving the formation of a new industrial cluster.
Seoul is home to many fabless companies, which seems attributable to the higher availability of high-quality human resources compared to other regions.
Pangyo Semiconductor Venture Town
Cheonan Foreign Investment Zone
Ochang complex and Asan complex
Source: KITA.net, Note: ( ) indicates year-on-year rates. 11

12. Enhancement of Technological Competitiveness
Promising investment areas of the semiconductor industry
Memory semiconductor market
Front-end processing technologies
System semiconductor market
Shift to high-capacity storage
through NAND flash memory
Development of MCPs and SiPs
to reduce the size of chips
High-K/metal gate is taking the place of SiON/poly gate from 45-nm.
MOTIE* : Ministry of Trade, Industry and Energy 12

13. Samsung Electronics to build the world's largest semiconductor complex
Enhancement of Technological Competitiveness
Samsung Electronics to build the world's largest semiconductor complex 1
Dram Processing
25 Nano →
20 Nano 2
Nand Flash
: 19 Nano 3
Plan to mass produce 14-nano semiconductors through FinFET technologies in 2015
Source: KITA.net, Note: ( ) indicates year-on-year rates. 13

14. Enhancement of Technological Competitiveness
Samsung Electronics to build the world's largest semiconductor complex
Construction to start in the early half of 2015
First phase investment :
KRW 16.6 trillion
-> Largest in the market’s history
Scheduled to be completed and operated by the end of 2017
MOTIE* : Ministry of Trade, Industry and Energy 14

15. Status of Foreign Direct Investment
Overview of FDI
Armed with the highly efficient performance of its financial sector and logistics industry as well as the strong competitiveness of its semiconductor industry, Korea is serving as the business hub of Northeast Asia.
Foreign Investment in Korea's Semiconductor Industry
2006
2007
2008
2009
2010
2011
2012
2013
2014.2Q
No. of
declarations
(cases)
146
101 80 84 92 69 59 44 25
Amount
declared
(USD 1 mn)
1,563
259
623
1,296
1,044
521
572
157
139
Source: Ministry of Trade, Industry & Energy 15

16. Status of Foreign Direct Investment
Overview of FDI
Large-scale annual investments by large-scale domestic semiconductor providers, such as Samsung Electronics and SK Hynix, result in active FDI in the semiconductor equipment and materials markets.
Foreign-invested companies in Korea's semiconductor industry
Source: KITA.net, Note: ( ) indicates year-on-year rates. 16

17. Status of Foreign Direct Investment
Status of Fairchild Korea Co., Ltd.
IGBT, Q-FET, SIP-TR, SPS $
Funded 100%
Switched the production line to 8-inch in 2014
Participated in an R&D project promoted by the government
Annual sales
KRW 700 bn
80 masters /
Ph.D. degree holders
430 university graduates
Employees
Source: Venture-In (2013) 17

18. Government Policies and Incentives
Take-off strategy issued by MOTIE*
Memory
System IC
Equipment & Materials
Support R&D investment (  USD 10 mn)
R&D investment (2017  USD 15
mn)
Develop HW + Embedded SW Platform
Asher, Vapor Blank MASK, CMP Slurry EFEM, RF Generator, etc.
MOTIE* : Ministry of Trade, Industry and Energy 18

19. Government Policies and Incentives
Strategic promotion of next-generation technology development "IC 2015"
Item
Details
DTV
Develop a multi-port, all-in-one interface for D-TV that supports HDMI, DisplayPort, MHL and ethernet connectivity and SoC for 2D/3D picture conversion in 3D-TV.
Develop SoC with a 10,000DMIPS or higher spec. for open smart TV boxes and commercialization platform.
Cellular phones
Introduce multi-band, multi-mode Wireless Connectivity IP and SoC for smart mobile devices.
Develop semiconductor elements for 3D space-touch multi-sensor systems using IrLEDs with sensing distance of 15 cm or more and sensing angle of ±30 or more.
Develop multi-purpose power management ICs for smart mobile devices.
Automobiles
Develop high-definition picture processing technology for SXGA-class vehicles and ECU integrated SoCs.
Develop SoC with built-in functions for braking systems in automobiles that meet international standards.
International cooperation
International cooperation for system semiconductor R&BD
MOTIE* : Ministry of Trade, Industry and Energy 19

20.
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