Busan Metropolitan City has chosen "marine semiconductors" as a make-or-break bid to revive the stagnant local economy. The plan is to shift an industrial structure overly dependent on tourism and services toward high value-added advanced industries and seize a new market called marine semiconductors by combining power semiconductors with shipbuilding.
On the 19th, Busan City held a launch ceremony for the "K-Marine Semiconductor Alliance." About 150 representatives and executives attended from semiconductor corporations such as SK keyfoundry and DB HiTek, and from major domestic shipbuilders such as HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries, including Mayor Park Heong-joon.
Power semiconductors are core components that convert and distribute electricity. If memory semiconductors led by Samsung Electronics and SK hynix are responsible for "storing" information, power semiconductors supply the "energy" suited to each device. They are essential across future industries such as electric vehicles, renewable energy, and aerospace, and are considered a high value-added field whose profitability can be up to 10 times that of general semiconductors.
There are clear crisis indicators behind Busan's do-or-die push into new industries. According to the Busan Chamber of Commerce and Industry's report, "Trends and tasks in the technology level of Busan-area manufacturing," high-technology products account for only 6.1% of shipment value among 375 local manufacturing corporations. That is one-fourth of the national average (24%). It means there are almost no growth-industry corporations in the region, such as semiconductors, secondary batteries, and pharmaceuticals.
Population decline is also serious. Busan's population peaked at 3.88 million in 1995, fell below 3.3 million in 2023, and is projected to slip into the 2 million range in 2034. Its status as the "second city" is also wobbling in terms of economic scale. According to national statistics, Busan's nominal gross regional domestic product (GRDP) was 121.067 trillion won as of 2024, trailing Incheon (125.592 trillion won) for the second year in a row.
A shortage of jobs due to the absence of large corporations is cited as a structural problem. As of 2024 sales, there are no Busan corporations among the nation's top 100 corporations. Only 28 Busan corporations make the top 1,000 by sales, down by 13 from 41 in 2015 over roughly a decade.
The industry currently supporting Busan's economy is the tourism-centered service sector. It accounts for more than 70% of GRDP. But what is inside that number? The number of foreign tourists topped 3 million last year, but compared with the record high in 2016 before COVID-19, the growth rate stayed around 2%. Many say it clearly has limits to driving the local economy in a short period.
In response, Busan City plans to foster a 590,000-square-meter (about 178,500-pyeong) area around the Dongnam Radiation Medical Science Industrial Complex in Gijang County as a power semiconductor cluster. More than 30 corporations have already confirmed they will move in, and more than 70 corporations have expressed additional interest in moving in. A Busan City official said, "We are reviewing an expansion of the complex to reflect corporate demand."
Busan City's ultimate goal is marine semiconductors. The goal is to build an ecosystem in which semiconductor corporations design and produce shipboard power and control semiconductors, and shipbuilders apply them to actual vessels for verification. Park said, "This is the first step in expanding the stage for applying the semiconductor industry to the ocean," adding, "We will grow Busan into a marine semiconductor hub that draws the world's attention."