The Korea International Trade Association (KITA) released a report highlighting the urgent need to develop the fabless ecosystem as non-memory semiconductors increasingly dominate global markets.
Korea's share of the global system semiconductor market stands at a mere 2 percent, trailing far behind the United States' commanding 72 percent, according to the report. Taiwan holds 8 percent, Japan 5 percent and China 3 percent.
The disparity becomes more concerning as non-memory semiconductors, led by system chips, accounted for 75.3 percent of global semiconductor sales as of May. This share is projected to reach about 80 percent by 2028.
Despite the challenges, Korea shows promise in fabless startup development, ranking fourth globally with 61 companies behind China's 567, the United States' 323 and India's 104.
Korean fabless startups demonstrate strong innovation potential, with 42.6 percent holding at least one patent - the second-highest rate globally after Israel's 68.8 percent.
However, the domestic ecosystem remains fragile, the report noted. Korean fabless startups attract an average of $37.8 million in cumulative investment, significantly less than China's $101.65 million and the United States' $82.72 million.
About 95 percent of Korean fabless startups remain in early funding stages focused on product launches or business expansion, while mature companies pursuing overseas expansion represent 29.9 percent in the United States and 14.8 percent in China.
The report recommended streamlining budget channels across multiple ministries and establishing clear allocation quotas for fabless firms within the government's semiconductor ecosystem fund.
"The government should take the lead in creating the ecosystem, and in the long term, promote autonomous growth led by the private sector," said Heo Seul-bi, a KITA researcher. "If Korea concentrates on developing capabilities in neural processing units and edge devices where it has strengths, it can seize opportunities in global competition."
reporter
Kim Dong-young
davekim0807@ajupress.com
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