South Korea’s share will decline from 31% in 2022 to 9% in 2032 as the United States expands its share in advanced logic (non-memory) semiconductors, a market previously dominated by Taiwan and Korea. Within a decade, the global semiconductor supply chain will reorganize around the U.S., as it has attracted numerous domestic semiconductor manufacturing facilities through the CHIPS Act.
The Semiconductor Industry Association (SIA) and The Boston Consulting Group (BCG) made the forecast in a report on the ‘New Resilience of the Semiconductor Supply Chain’ on May 8. A semiconductor industry official said, “The U.S. semiconductor rollout roadmap will be completed within ten years, threatening even the most advanced semiconductors where Korea has been leading.” Despite this, Korea is expected to move from third to second place in overall semiconductor production during this period, as its share of DRAM is projected to expand due to the booming demand for AI semiconductors.
According to the SIA and BCG report, U.S. semiconductor capacity in 2032 will be 203% higher than in 2022, the highest increase compared to other regions, including South Korea (129%), Europe (124%), Taiwan (97%), Japan (86%), and China (86%). The report said, “Investments under the CHIPS Act will bolster U.S. semiconductor manufacturing growth and the economy.” Passed in 2022, the CHIPS Act provides $52.7 billion in subsidies to companies building semiconductor manufacturing facilities in the U.S. The world’s top foundry, Taiwan’s TSMC, Samsung Electronics, Intel, and Micron, are among the recipients. Since 2020, 26 new fabs (semiconductor production facilities) have been built in the U.S., compared to seven in Taiwan, four in Japan, and three in Korea. The report said, “Over the next decade, the U.S. is expected to attract $646 billion in investment, more than a quarter (28%) of all global semiconductor investment.”
In particular, the U.S. is rapidly catching up to Korea and Taiwan in advanced semiconductors. In 2022, Taiwan and Korea held 69% and 31% shares of the production of the most advanced semiconductors below 10 nanometers (a nanometer is one-billionth of a meter). Taiwan’s TSMC and Korea’s Samsung Electronics are the leading players. However, by 2032, Taiwan’s and Korea’s shares will fall to 47% and 9%, respectively. Meanwhile, the U.S. share is projected to rise from 0% in 2022 to 28% in 2032, placing it second only to Taiwan. This surge is due to the U.S. quickly gaining prominence by attracting cutting-edge semiconductor producers. TSMC and Samsung Electronics will produce 2-4 nanometer semiconductors in the U.S., and Intel, receiving $19.5 billion in U.S. government funding, is also investing in state-of-the-art production facilities.
Although Korea lacks a strong presence in the advanced logic semiconductor market, its overall semiconductor production capacity is expected to increase due to the growth of the AI semiconductor market. According to the report, Korea is expected to surpass Taiwan to become the second-largest semiconductor producer by 2032, increasing its share from 17% in 2022 to 19%, the highest ever. This ranks Korea second only to China, which holds a 21% share. Europe, Japan, Taiwan, and China are predicted to have the same or lower shares compared to 2022, while the U.S. is expected to increase its share from 10% to 14%. SIA estimates that without the CHIPS Act, the U.S. share of production in 2032 would have fallen to 8%.
