South Korea Commits 500 Billion Won to Next-Generation Power Semiconductors
Claire Weston
Seoul launched its "Super Innovation Economy Project," earmarking ₩500 billion (~$330 million) in state funds for SiC and GaN power chips; with private co-investment the total reaches ₩750 billion (~$494 million) — elevating power semis to a national priority on par with memory chips.
Where is the money going?
The core targets are silicon carbide (SiC) and gallium nitride (GaN) — so-called third-generation semiconductor materials that handle higher voltages, temperatures, and frequencies than traditional silicon.
The government requires supply-chain companies to participate in full-cycle development — from raw materials and devices to modules and system demos — with a commercialization roadmap due this month.
This means → Seoul is not just funding lab research; it is pulling an entire industry chain toward mass production.
Why do power semiconductors suddenly matter this much?
Power semiconductors — the chips that convert and control electrical energy — are the shared foundation of AI data centers, electric vehicles, and smart grids.
Surging AI compute demand → rising dependence on stable, efficient power delivery in data centers → direct pull on high-end power devices.
In plain terms = whether you are training a large model or driving an EV, electricity has to be "fed in" precisely; power chips are the gatekeepers of that feed.
What does the global supply picture look like?
An ICBC Credit Suisse Asset Management report in June noted that shrinking mature-node foundry capacity plus exploding AI demand are creating a structural shortage in global power semis.
MOSFET and third-gen device prices keep climbing; some vendors have raised prices twice this year.
CITIC Securities added that new applications — 800 V high-voltage DC in AI servers, solid-state transformers — are accelerating high-end demand, pushing SiC/GaN into a high-growth channel.
Is South Korea entering too late?
Deputy Prime Minister Choo Kyung-ho stated explicitly that Korea must "discover a second and third semiconductor-scale growth engine" — This means → the government now positions power semis as the next national bet after memory chips.
The Ministry of Trade, Industry and Energy has already set up a task force to upgrade wafer-fab capacity in dedicated parks in Busan and Pohang.
But first movers — Japan's Rohm and America's Wolfspeed — have years of head start in SiC/GaN mass production. This reflects a deeper test: Korea's real challenge is not funding but industrialization speed.
What does this signal in the bigger picture?
At the same policy meeting, power semiconductors were listed alongside small modular reactors (SMRs) and sensor-based AI as the three priority projects for future growth engines.
In plain terms = Seoul is betting on three tracks at once — "chips that manage power," "small reactors that generate power," and "sensors plus AI" — all pointing to one conviction: the intersection of energy and compute is the core battlefield of the next industrial cycle.
Whether the bet pays off hinges on whether this month's commercialization roadmap can truly align capital, talent, and production lines.
Content is for reference only, not financial advice.