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Korea’s Heavy Bet on Next-Gen Power Semiconductors: From Follower to Future Core Industry
Introduction
Recently, the South Korean government officially launched the “Super Innovation Economy Project,” planning 500 billion won in state funds dedicated to next-generation power semiconductor technology. Combined with private investment, the total project size expands to 750 billion won. The Seoul Economic Daily notes that Korea is elevating power semiconductors to a strategic level similar to memory chips, aiming to accelerate the cultivation of a new industrial pillar through state power. This move reflects Korea’s keen judgment on global semiconductor landscape shifts and its proactive layout for future growth engines amid rapid developments in AI, EVs, and power infrastructure.
1. Why Power Semiconductors Are Korea’s New Focus
At the urgent economic command meeting on June 14, Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol finalized the project details, demanding a roadmap for next-gen power semiconductor commercialization by month’s end. Unlike traditional chips focused on information processing, power semiconductors handle energy conversion, control, and distribution, acting as the “energy gate” in power systems. With AI data centers, EVs, and smart grids demanding higher efficiency supply, the strategic value of power semiconductors rises rapidly.
Especially after the AI computing boom, data center power consumption has soared. Stable transmission and efficient conversion have become core operational issues. Those who can provide higher efficiency and lower loss devices under high voltage, temperature, and frequency will likely gain an edge in the next industry upgrade. Therefore, Korea‘s national project isn’t just a single technology push but a systemic grab for future energy and computing infrastructure.
2. Technology Focus: SiC and GaN, Aiming for 3rd Gen Semiconductor High Ground
Korea‘s focus is on compound semiconductors like SiC and GaN. Compared to traditional silicon, SiC and GaN offer advantages in high voltage, temperature, and frequency applications, especially in EV main drives, AI server power modules, fast chargers, and high-end industrial controls.
The government emphasizes full-cycle collaborative development from materials, devices, modules to system demonstrations, indicating it is no longer satisfied with improving a single link but aims to build a complete industrial ecosystem. This model shortens the path from lab to commercialization and enhances local firms’ voice in standard setting, product verification, and supply chain integration.
Notably, the Ministry of Trade, Industry and Energy has already set up a task force to upgrade wafer fabs in specialized parks like Busan and Pohang. This shows Korea is speeding up the formation of a 3rd gen semiconductor manufacturing and R&D hub through regional clustering and industrial policy synergy.
3. Policy Backdrop: Pre-positioning for Future Industrial Landscape
In Korea‘s plan, next-gen power semiconductors are listed alongside small modular reactors (SMR) and sensor AI as key future growth engine projects. This sends a clear signal: Korea is shifting from a “memory chip-dominated” structure to a “multi-technology-supported” new pattern.
The practical logic is clear. The global semiconductor market is moving from pure computing power to energy efficiency, reliability, and system synergy. New applications like 800V high-voltage DC architectures in AI servers and solid-state transformers are driving high-end power device demand. ICBCC fund research notes that due to mature process capacity shrinkage and AI demand explosion, global power semiconductors face structural shortages, with MOSFET and 3rd gen device prices rising. CITIC Construction also believes SiC/GaN markets have entered high-growth phase.
This means power semiconductors are no longer just supporting components for automotive and industrial fields but are becoming key infrastructure for the AI era’s energy system. Korea‘s aggressive entry is essentially competing for technology definition and market first-mover advantage in the next industrial cycle.
Conclusion
Korea’s launch of the Super Innovation Economy Project with massive investment in next-gen power semiconductors shows its precise judgment of global tech competition trends. Facing new demands converging from AI, electrification, and energy transition, power semiconductors have evolved from behind-the-scenes components to core determinants of industrial efficiency and system performance. Korea seeks to build competitive advantages in 3rd gen semiconductors like SiC and GaN through state funds, industrial synergy, and regional manufacturing upgrades, nurturing the next strategic pillar after memory chips.
From a global perspective, the race in power semiconductors has just begun. Whoever can break through the comprehensive barriers of materials, processes, and systems first will gain the initiative in the future AI energy era. Korea’s step is both a catch-up and a bet on the future.
