Last month, a friend went to South Korea with a business delegation for a visit.
They conducted on-site visits to several local semiconductor equipment and materials companies and also attended South Korea’s largest semiconductor exhibition, SEMICON KOREA.
In China, people might be more familiar with overseas electronics exhibitions in Germany and Japan, while South Korea’s semiconductor exhibitions are relatively “niche” and not widely known. This time, they were fortunate to be accompanied by an industry veteran who has worked in the semiconductor equipment sector for over a decade. Under his guidance, they explored SEMICON KOREA thoroughly and carefully!
Here are some brief impressions.
This year marked the 36th edition of SEMICON KOREA, with around 500 equipment and materials companies exhibiting at over 2,000 booths and attracting more than 70,000 professional visitors. More than 300 were Korean domestic semiconductor equipment and materials companies, many of which are small to medium-sized and rarely seen at other exhibitions.
In addition to its large scale, the exhibition revealed that Korea’s semiconductor companies span the entire supply chain with a wide range of categories and finely divided specializations, creating a vibrant industrial atmosphere.
When talking about the semiconductor industry, people often think of Europe and the U.S., but South Korea’s semiconductor industry has also developed significantly.
In terms of sales revenue, South Korea ranks as the world’s second-largest semiconductor country, second only to the U.S.
Samsung and SK Hynix lead the memory industry, occupying over 70% and 50% of the global market share in DRAM and NAND flash memory respectively, firmly holding a dominant position. They also play a significant role in niche chip sectors like CIS, DDIC, and SSD controllers.
In recent years, South Korea has started building industry clusters around its strong memory and display panel sectors. It has also pursued a degree of localization in upstream equipment and materials, allowing some domestic companies to grow stronger. For example, PSK has maintained the number one global market share in photoresist stripping applications.
However, developing South Korea’s semiconductor industry to its current state hasn’t been easy.
Its success is the result of strategic government guidance, technological breakthroughs by enterprises, and vertical integration across the industry chain. In 1975, the South Korean government enacted the Electronic Industry Promotion Act, designating semiconductors as a national strategic industry. Through the Korea Institute of Science and Technology (KIST), U.S. technologies were introduced, and the Korea Semiconductor Research Institute (KSI) was established for R&D.
After 1983, Samsung announced it would aggressively develop semiconductors starting with DRAM research. But just as Samsung entered the memory market, the industry entered a downturn. The price of DRAM dropped from $4 at the start of 1984 to $0.30 in 1985, not even covering a fraction of production costs. Between 1984 and 1987, Samsung’s semiconductor division accumulated losses of 115.9 billion KRW, putting it in a difficult position.
Later, the South Korean government decisively intervened, adopting Japan’s model for tackling core technologies. In 1985, the Korea Institute of Electronics Technology was established, becoming the core R&D hub and organizing chaebols like Samsung, Hyundai, and LG to participate in semiconductor development. The total R&D investment reached 177.9 billion KRW, with 125 billion KRW—around 70.26%—contributed by the government.
Eventually, by adopting a “counter-cyclical investment” strategy, Samsung expanded production capacity when global memory chip prices fell in the 1990s. In 1993, it surpassed Japan’s NEC to become the DRAM market leader, ushering in the golden era of South Korea’s semiconductor industry.
In 2019, South Korea’s semiconductor industry also faced a critical challenge. Japan announced restrictions on exports of three key semiconductor materials to South Korea—photoresist, fluorinated polyimide, and hydrogen fluoride—which are essential in semiconductor and display panel production, and are core raw materials imported by chip giants like Samsung and SK Hynix.
In response, South Korea launched massive investment plans to support domestic substitution. Previously, the pace of localizing semiconductor equipment and materials had slowed, but this move pushed Korea to attempt domestic replacements in areas with high technical barriers.
These restrictions were lifted in 2023.
The storyline might feel familiar—there are many similarities between our semiconductor industry and South Korea’s, so there’s definitely value in learning from their success.
Another special feature of Korea’s semiconductor industry—one that is often overlooked—is its highly specialized vertical segmentation. For instance, South Korea is home to the world’s leading second-hand semiconductor equipment company: SurplusGLOBAL.
SurplusGLOBAL’s emergence benefited from the development of Korea’s panel and memory industries, which involve complex processes and require a wide variety of equipment. Take the memory sector for example: it’s highly advanced, with large production volumes and fast iterations. Memory fabs have high demands for process equipment and need frequent upgrades. Compared to other chips, memory equipment has shorter replacement cycles—sometimes just three to five years, and in fast-evolving cases like HBM, some tools may be obsolete in two to three years.
Moreover, large, mature fabs often buy equipment one or two generations ahead. While such tools may not be usable immediately at current process nodes, they are purchased in advance from a long-term technical perspective.
What happens to the replaced equipment? Sell it second-hand!
That’s how SurplusGLOBAL grew strong.
This remarkable company, since its founding in 2000, has successfully traded more than 40,000 semiconductor tools—from front-end to back-end processes—with over 4,000 companies across more than 50 countries worldwide.
Its business scope is broad, including second-hand equipment trading, full line procurement, re-marketing solutions, power-on demonstrations, global sourcing, reconfiguration, refurbishment, fab consulting, logistics, warehousing, equipment leasing, and shared fabs.
During the business visit, they also toured SurplusGLOBAL and discovered that by the end of this year, they’ll be launching a new service called SemiMarket, which will mainly offer:
● Procurement and sales of semiconductor equipment and components
● Verified second-hand semiconductor equipment and refurbishment services
● Support for power-on demonstrations
It’s essentially a one-stop platform tailored for the second-hand semiconductor equipment and parts industry—a rare and worth-studying format.
Conveniently, from March 26–28, SurplusGLOBAL will be exhibiting together with EQGLOBAL at SEMICON CHINA 2025, offering a great opportunity to explore this fascinating company right in Shanghai.
Source: 芯片超人花姐
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