South Korea’s plan to expand domestic foundry capacity

December 12, 2025 /SemiMedia/ — South Korea is reviewing a 4.5 trillion won (about USD 3.06 billion) investment plan to build a new semiconductor foundry, according to the Ministry of Trade, Industry and Energy. The project would be financed through a mix of public and private funding and is aimed at reinforcing the country’s long-term chip competitiveness.

The initiative follows a high-level meeting on December 10 led by President Lee Jae-myung, joined by senior executives from Samsung Electronics, SK Hynix, policymakers and industry specialists. Discussions focused on maintaining Korea’s strength in memory, expanding its foundry capabilities and supporting local fabless growth as AI reshapes chip design requirements.

The ministry said the government is considering the establishment of a 12-inch, 40-nanometer foundry line to help domestic fabless companies develop and validate new designs. Officials noted that Korea still relies heavily on overseas manufacturing for many non-memory chips, and additional local capacity would reduce structural vulnerabilities.

Defense semiconductor localization as a strategic priority

Defense semiconductor supply was also highlighted. With roughly 99% of Korea’s defense-related chips sourced from abroad, the government plans to pursue localization efforts and may introduce legal provisions requiring priority procurement of domestic semiconductors for national security infrastructure projects.

A new presidential-level semiconductor task force, chaired by Lee Jae-myung, will be set up to coordinate national chip policy and oversee long-term strategy, according to the ministry.