Koo Yun-cheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, appeared on a YouTube channel on the 30th and said, "It is as clear as day that there will be more excess tax revenue," adding, "If we develop items on par with second- and third-generation memory semiconductors, invest boldly, and build a virtuous cycle, more excess tax revenue will come in." He also said, "To head into an artificial intelligence (AI) economy, in addition to the brain that stores data, we need sensors that serve as the 'eyes.'"
Accordingly, the background behind Deputy Prime Minister Koo mentioning "sensors" as an investment destination after semiconductors is drawing attention. If memory semiconductors are the brain that remembers and stores data, sensors play the role of the eyes that recognize surrounding objects and the environment. They are also assessed as a core infrastructure of the next-generation artificial intelligence (AI) industry. The global market size is estimated at $102.57 billion (154.6242 trillion won) this year. However, domestic corporations' global market share is said to be so weak that it does not reach 5%.
◇ Korea's sensor ecosystem is insufficient... in China and Japan, governments pay subsidies
Sensors are expected to grow rapidly, centered on devices that must properly recognize external environments, such as autonomous vehicles where AI technology is applied, Smart Factory, and robots. According to Fortune Business Insights, the sensor market size is projected to grow to $334.08 billion (503.6256 trillion won) by 2034, about three times its current level.
The market outlook is bright, but the prevailing view is that domestic corporations' market share, technological competitiveness, and manufacturing ecosystem are overall weak. Except for smartphone image sensors produced by Samsung Electronics, most items must be sourced from overseas companies.
Overseas, government-level investment is underway to strengthen competitiveness in the image sensor market. The Chinese government has created a fund to support the semiconductor industry and is paying research and development (R&D) subsidies to sensor corporations such as OmniVision and GalaxyCore. It is also investing in foundry (semiconductor contract manufacturing) corporations that produce sensors, including SMIC and Hua Hong Semiconductor. The most recent third-phase fund created by the Chinese government amounts to 344 billion yuan (about 6.5 trillion to 7.2 trillion won).
The Japanese government, based on the Economic Security Promotion Act, finalized subsidies of about 60 billion yen (about 550 billion won) for Sony's new Kumamoto plant, the global No. 1 in the image sensor market. The Economic Security Promotion Act is a law enacted to strengthen supply chains for items essential to the national economy, such as semiconductors. The total investment in this plant is about 180 billion yen, of which the Japanese government will directly fill with tax money an amount reaching 33%.
The United States, using $39 billion (about 60 trillion won) raised through the CHIPS Act, pays direct subsidies to corporations that produce sensors, including global foundries. Europe, through its Chips Act enacted to reduce external dependence on the semiconductor supply chain and strengthen its own production capacity, supports sensor design and manufacturing corporations such as ams OSRAM, STMicroelectronics, and Infineon Technologies AG.