July 6—Samsung is working on localizing its semiconductor supply chain within its home country of South Korea, reports Tech Wire Asia. The world’s second-largest chipmaker is changing things to avoid the sourcing issues it encountered recently because of the coronavirus pandemic.
Samsung’s localization efforts follow a new Seoul initiative to cultivate a more robust domestic technological infrastructure.
Samsung Strengthens Local Ties
Like the rest of the tech sector, Samsung had its operations significantly upended by the coronavirus outbreak. The global health crisis negatively impacted the company’s ability to acquire materials and equipment from foreign suppliers. To protect itself from future operational problems, the company is forging new deals with local component sector businesses.
Samsung has arranged to acquire high-performance laser DRAM fabrication equipment from EO Technics and ceramic powder used in chip etching tasks from Cinos. The conglomerate will also buy semiconductor manufacturing tools from Eugene Technology and PSK, as well as TES and Wonk IPS.
By consolidating its supply chain, the firm moves closer to fulfilling its goal of becoming the world’s biggest component supplier. In the future, the company’s production efforts will be better protected from global trade tensions and widespread travel controls. The corporation is also bolstering its bottom line by significantly reducing its shipping costs.
Government Supported National Tech Industry Growth
In May, the South Korean government announced plans to hasten the country’s recovery from the coronavirus pandemic by pouring money into artificial intelligence and 5G network development. Government officials want to create new jobs and revenue by progressing the application and faculty of the two cutting-edge technologies. Seoul plans to support the initiative by providing local companies in those fields with funding.
As one of the world’s leading manufacturers of fifth-generation mobile data devices, Samsung will likely receive some of that money. With its expertise and production resources, the conglomerate could fabricate the components the South Korean government needs for its smart factories, self-driving cars, and smart cities.
Seoul’s program follows on the heels of similar government-sponsored semiconductor development initiatives from China, Germany, India, Israel, Ireland, and Taiwan. The United States legislature is currently considering two bills which would stimulate the American chip-making field with $47.8 billion in funding.
As nations strive to cultivate their domestic component sectors, international chip fabricators may find their products have less global appeal. As such, those manufacturers will need to localize their supply chains and take advantage of regional revenue opportunities. Thanks to its recent strategic moves, Samsung is well-prepared for the industry’s uncertainties.
