In Taiwan, home to the headquarters of the world's largest foundry corporations, TSMC, a note of caution emerged over Korea's large-scale semiconductor and artificial intelligence (AI) investment plans.
According to Taiwanese media including the United Daily News and China Times on the 30th, Liu Feizhen, a researcher at the Taiwan Institute of Economic Research (TIER), analyzed that Korea's announcement of the "three mega projects" (semiconductors, AI data centers, physical AI) will intensify direct competition between Taiwan and Korea.
Liu predicted that Korea's mega investment will serve as a practical upgrade driver that spurs Taiwan to further accelerate research and development (R&D) for advanced process technology.
He emphasized, however, that Taiwan's irreplaceable value as a global semiconductor hub will be maintained.
Lin Weizhi, executive vice president of the ZHIFU Industry Trend Research Institute and former vice president of strategy at Foxconn (Hon Hai Precision Industry) in Taiwan, argued that Korea's plan focuses on absorbing the outflow effects of the AI market and imitates the science parks that are the key to the success of Taiwan's semiconductor industry.
He said that if global demand slows in the future, Korea will face challenges due to insufficient domestic demand and high depreciation expense, but Taiwan, having settled into a mature stage, will likely maintain solid core competitiveness.
Assuming AI demand slows around 2032, because the Korea government-led project will take about five to six years, depreciation of plant construction equipment may not be completed, meaning Korea's potential losses could be greater than Taiwan's.
They also noted that fostering a semiconductor cluster requires a long period of time, pointing out that even after China invested for 10 years it still has not surpassed Taiwan, and that Korea does not have a vast domestic market like China.
Taiwanese experts interpreted the semiconductor industry as one that is inherently capital-intensive and expense-heavy, saying Korea's primary goal in investing in the Honam region is to ease the rising pressure on land, water, power, and expenses in the capital area.
However, they pointed out that massive investment entails astronomical fixed depreciation costs. Considering that the Korean economy is centered on large tech corporations, experts warned that if demand slows or utilization declines, depreciation costs could erode corporations' profits, pushing those corporations into a "capital expenditure trap."
Earlier, the Korea government and corporations including Samsung Electronics and SK hynix announced a semiconductor investment plan of about 1,500 trillion won, including a Honam region semiconductor production base (800 trillion won) unveiled the previous day. If all the long-term investment plans additionally disclosed by corporations are combined, the total reaches the 4,700 trillion won range.