System Semiconductors Account for 70% of Global Chip Market
Korea's semiconductor industry still has a long way to go as its share of the global fabless market is a mere 1 percent, an industry expert pointed out in a recent seminar held at the National Assembly.
“The size of the global semiconductor market stood at US$556 billion in 2021, with system semiconductors accounting for 70 percent (US$389.2 billion),” said Lee Seo-kyu, chairman of the Korea Fabless Industry Association, at the seminar.
The development of 5G, autonomous driving, artificial intelligence (AI), virtual reality (VR) and the internet of things (IoT) will steadily fuel the growth of the system semiconductor market. In particular, the fabless industry, which specializes in semiconductor design, is considered an essential field for securing national competitiveness. However, Korea's share of the global fabless market is a mere 1 percent, staying far behind Taiwan and China.
According to IC Insights, a market research institute, chip design companies headquartered in Korea accounted for only 1 percent of the global fables market in terms of sales. This percentage fell short of Taiwan’s 21 percent and China’s 9 percent. The United States dominated the world fabless market with a 68 percent share.
“Korea has advanced foundry and memory industries, strong IT infrastructure and excellent IT human resources,” Lee said. “So, Korea has a good environment for the growth of the fabless industry.”
Currently, the Korean fabless industry is suffering an absolute shortage of designers. While the government is making efforts to foster fabless professionals, they are absorbed by large corporations such as Samsung Electronics and SK Hynix.
In Silicon Valley, fabless companies grow by securing technology and talent through mergers and acquisitions. But in Korea, fabless professionals are leaked to the outside amid an absence of such a mechanism.