The Korean government has initiated a review of policy support, including tax benefits, for materials, parts, and equipment essential for High Bandwidth Memory (HBM) chip manufacturing. This move aims to bolster the country's semiconductor industry, a critical pillar of its economy.

Last year, Korean giants SK Hynix and Samsung Electronics dominated the global HBM market, holding a combined market share of over 90%, with SK Hynix at 53% and Samsung Electronics at 38%. The global HBM market, currently valued at $141 billion, is projected to grow to $377 billion by 2029, according to French market research firm Yole Group. This rapid growth underscores the importance of maintaining a competitive edge in this sector.

However, there are growing concerns about Korea's high dependency on foreign countries, particularly Japan, for HBM materials, parts, and equipment. Domestically, companies like Hanmi Semiconductor, SEMES, and Hanwha Precision Machinery are producing essential equipment such as Thermal Compression (TC) Bonders, which are crucial for HBM manufacturing. Yet, for newer HBM products with more than 12 layers, next-generation equipment like hybrid bonders is required. In this field, companies such as Japan's Tokyo Electron (TEL) and Austria's EVG are highly competitive.

Professor Park Jae-geun from Hanyang University's Department of Convergence Electronics Engineering highlighted the significant R&D costs required to develop domestic HBM materials and equipment. "The process of developing domestic HBM materials or equipment will require substantial R&D costs," he stated, emphasizing the financial challenges involved.

The semiconductor industry has been vocal about the need for government support through the designation of national strategic technologies for HBM materials, parts, and equipment. An industry insider noted, "While HBM device technology is included in national strategic technologies, materials and equipment for HBM are not. These should be added to the list of national strategic technologies." This sentiment reflects a broader consensus within the industry that such support is essential for maintaining Korea's competitive edge in the global HBM market.

Last month, the government announced a comprehensive support plan for the semiconductor ecosystem, which included expanding the scope of R&D tax credits for semiconductors. This plan is part of a broader strategy to strengthen the country's semiconductor industry amid increasing global competition and supply chain vulnerabilities.

The current situation highlights the strategic importance of HBM technology in high-performance computing, graphics, and artificial intelligence applications. HBM's high speed and efficiency, achieved by stacking multiple DRAM chips vertically, make it a critical component in these advanced technologies.

As the global HBM market continues to grow, the Korean government's proactive approach in reviewing and potentially expanding policy support for the materials, parts, and equipment sector is a crucial step. This support could mitigate the high R&D costs and foster innovation, ensuring that Korean companies remain at the forefront of the HBM market.

The industry has also suggested that power management semiconductors (PMIC) be included in the list of national strategic technologies, reflecting the evolving needs and priorities of the semiconductor sector. As the government continues its review, the inclusion of HBM materials and equipment in national strategic technologies could provide the necessary boost for domestic manufacturers to compete globally.