South Korea's Industry Minister Warns China's Chip Advancement Is 'Alarming,' Fears Losing Semiconductor Edge

South Korea's Minister of Trade, Industry and Energy, Kim Chong-kook, stated on Thursday (6th) that the pace of China's advancement in semiconductor technology is 'alarming.' He emphasized that this race has evolved into an 'all-out war' involving both nations and corporations, and warned that if South Korea does not speed up its investment, it risks losing its competitive advantage within the next one or two years.

Kim expressed strong alarm over China's progress in semiconductor materials, components, and equipment. In particular, news that Shanghai Micro Electronics, a Chinese state-owned enterprise, had successfully mass-produced immersion deep ultraviolet (DUV) lithography machines sent shockwaves through South Korea's industry.

Kim noted that despite U.S. export controls, these restrictions have instead accelerated China's independent technology development. Chinese firms such as ChangXin Memory Technologies (CXMT) are even expanding aggressively, investing resources exceeding their revenue.

According to forecasts, the global memory market is expected to grow from the current $200 billion to $1 trillion within five years. Although South Korea currently holds around 65% market share, Kim stressed that once semiconductor suppliers are selected, they are rarely replaced. Therefore, South Korea must establish an absolute 'first-mover advantage' during this period of market expansion. He pointed out that building a single wafer fabrication plant costs between 150 trillion and 200 trillion Korean won, making it imperative not to remain complacent.

In response to domestic calls urging Samsung Electronics and SK Hynix to engage in 'social benefit redistribution' or increase dividends, Kim clearly opposed such demands. He described semiconductors as 'the last goose that lays golden eggs' for South Korea, warning that cutting open the goose to divide profits would lead to the industry's demise. He emphasized that 'investment is distribution,' and profits should be fully reinvested into R&D and infrastructure.

Additionally, he advocated reforming the 52-hour workweek system by exempting R&D personnel, so time constraints do not hinder competitiveness. He also urged the National Assembly to swiftly pass the 'Semiconductor Special Act' to ensure policy continuity and secure infrastructure support such as electricity and water supply.