South Korea accelerates HBM supply chain development, Japanese chip equipment manufacturers join in layout
As South Korea accelerates the development of high bandwidth memory (HBM) supply chains for artificial intelligence (AI) computing, Japanese chip manufacturing equipment companies are seeking supply agreements with companies leading the field.
Tokyo Electron (TEL), Japan's largest chip equipment manufacturer, is establishing its fourth Korean research and development center in Longin City near Seoul. The facility is scheduled to open in 2026 and will be equipped with advanced equipment that customers can use for prototype design. Development speed is the most important, "said Won Jaihyung, President of TEL Korea.
The Longren Semiconductor Cluster Industry Center is expected to open in 2027, and SK Hynix and Samsung Electronics plan to invest heavily in producing HBM and other products here. TEL Korea has doubled its workforce in the past five years, with a focus on engineers who can handle equipment maintenance for customers.
HBM has the advantages of high performance and low power consumption, making it very suitable for AI servers that require fast processing of large amounts of data. Gartner predicts that the global market size of HBM will grow more than six times from 2023 to 2027, reaching $17.5 billion. According to TrendForce data, SK Hynix currently holds approximately half of the market share, followed by Samsung Electronics with a share of about 40%.
HBM is made by stacking DRAM chips, which requires thinner and more precise wafers. This in turn requires more and higher quality equipment, as well as more cooperation between chip and device manufacturers.
Another Japanese supplier, Towa, plans to launch a factory in Cheonan City by March 2025 to manufacture molding equipment, which is the final stage of HBM's production process. The project cost tens of millions of dollars and is the largest project for Towa's Korean subsidiary since its establishment in 2013. Once fully operational, sales and production capacity are expected to double compared to the year ending March 2024.
This factory is Towa's bigger bet on South Korea, as Towa previously mainly produced molding equipment in China and Malaysia. The storage product market has ups and downs, but we expect the HBM market to definitely grow, "said a representative from Towa. We are establishing a supply network that is close to our customers
Disco is a leading Japanese wafer cutting and grinding equipment manufacturer that is increasing its local recruitment efforts in South Korea. In 2024, the company will begin accepting interns who have not studied Japanese for future full-time positions. Now is the time to systematically recruit and cultivate talent to meet future business opportunities, "said Hayato Watanabe from Disco Korea
According to the Korea Semiconductor Industry Association, although South Korea has strong capabilities in semiconductor production, its chip manufacturing equipment only purchases about 20% of the market share locally. Technological challenges make it difficult for new entrants to enter the field.
The South Korean government has designated HBM as a strategic technology and provided 26 trillion Korean won ($19.6 billion) in tax breaks and other support to promote semiconductor investment. It will also triple the subsidy budget for foreign manufacturers, reaching 200 billion Korean won by 2024, with the aim of attracting top global companies to join the country's technologically backward fields.
A particularly favorable factor for Japanese companies is the easing of Japan Korea relations, "said an employee of a materials manufacturer," which makes it easier to advance investments without worrying about public opinion
The expectation of continued growth in the HBM market will prompt South Korea to make long-term efforts to shift towards domestic procurement of equipment and materials. Hanhua Group has announced plans to develop HBM assembly equipment.
The Longren Semiconductor Cluster Industry Center is expected to open in 2027, and SK Hynix and Samsung Electronics plan to invest heavily in producing HBM and other products here. TEL Korea has doubled its workforce in the past five years, with a focus on engineers who can handle equipment maintenance for customers.
HBM has the advantages of high performance and low power consumption, making it very suitable for AI servers that require fast processing of large amounts of data. Gartner predicts that the global market size of HBM will grow more than six times from 2023 to 2027, reaching $17.5 billion. According to TrendForce data, SK Hynix currently holds approximately half of the market share, followed by Samsung Electronics with a share of about 40%.
HBM is made by stacking DRAM chips, which requires thinner and more precise wafers. This in turn requires more and higher quality equipment, as well as more cooperation between chip and device manufacturers.
Another Japanese supplier, Towa, plans to launch a factory in Cheonan City by March 2025 to manufacture molding equipment, which is the final stage of HBM's production process. The project cost tens of millions of dollars and is the largest project for Towa's Korean subsidiary since its establishment in 2013. Once fully operational, sales and production capacity are expected to double compared to the year ending March 2024.
This factory is Towa's bigger bet on South Korea, as Towa previously mainly produced molding equipment in China and Malaysia. The storage product market has ups and downs, but we expect the HBM market to definitely grow, "said a representative from Towa. We are establishing a supply network that is close to our customers
Disco is a leading Japanese wafer cutting and grinding equipment manufacturer that is increasing its local recruitment efforts in South Korea. In 2024, the company will begin accepting interns who have not studied Japanese for future full-time positions. Now is the time to systematically recruit and cultivate talent to meet future business opportunities, "said Hayato Watanabe from Disco Korea
According to the Korea Semiconductor Industry Association, although South Korea has strong capabilities in semiconductor production, its chip manufacturing equipment only purchases about 20% of the market share locally. Technological challenges make it difficult for new entrants to enter the field.
The South Korean government has designated HBM as a strategic technology and provided 26 trillion Korean won ($19.6 billion) in tax breaks and other support to promote semiconductor investment. It will also triple the subsidy budget for foreign manufacturers, reaching 200 billion Korean won by 2024, with the aim of attracting top global companies to join the country's technologically backward fields.
A particularly favorable factor for Japanese companies is the easing of Japan Korea relations, "said an employee of a materials manufacturer," which makes it easier to advance investments without worrying about public opinion
The expectation of continued growth in the HBM market will prompt South Korea to make long-term efforts to shift towards domestic procurement of equipment and materials. Hanhua Group has announced plans to develop HBM assembly equipment.