The South Korean government approved a comprehensive defense semiconductor localization strategy at the 11th Science and Technology Ministers' Meeting held on the 23rd, with the Ministry of Science and ICT, Ministry of Trade, Industry and Energy, and Defense Acquisition Program Administration (DAPA) jointly reviewing the plan. The strategy mandates the application of domestically verified semiconductors in weapon systems and establishes a public-private joint production facility to address the country's 99% import dependency in defense semiconductors. This initiative follows the government's December semiconductor industry strategy, which allocated 635.5 billion won from 2025 to 2031 for full-cycle technology development spanning materials, design, processes, and systems.
Government Mandates Domestic Semiconductors in Weapon Systems
The government will base defense semiconductor development on stable demand derived from weapon system acquisition plans. Domestic products that pass government-led reliability testing and verification will be mandatorily applied to actual weapon systems. The policy establishes production infrastructure using existing public and private fabs, while the planned public-private joint "win-win fab" will support defense semiconductor manufacturing and mass production R&D for private foundries. The government will separately designate and nurture defense semiconductor companies, promote specialized workforce training, and build domestic industry-academia-research networks alongside international cooperation frameworks.
Public-Private Win-Win Fab Construction Advances from Planning to Implementation
The December strategy designated private foundry manufacturing capacity enhancement and defense semiconductor-specialized public-private joint foundry establishment as mid-to-long-term review tasks, contingent on demand expansion. The current strategy explicitly includes win-win fab construction as a policy commitment, advancing government policy on defense semiconductor production facilities from review to implementation stage. The December plan allocated 195 billion won from 2025 to 2034 to establish prototype production and small-batch initial mass production systems centered on public fabs including the Electronics and Telecommunications Research Institute (ETRI) and Korea Institute of Nanotechnology. Specific details regarding the win-win fab's investment scale, location, public-private equity structure, and operation timeline remain undisclosed. A Ministry of Trade, Industry and Energy official stated that decisions on constructing new production facilities versus establishing defense semiconductor-dedicated production lines within existing private foundries have not been finalized and will continue to be discussed.
Specialized Defense Semiconductor Companies Gain Legal Framework
The government now provides long-term acquisition plans specifying required items and anticipated demand, while leading testing and verification processes to reduce business uncertainty for companies in development and market access. The specialized company designation concept, previously proposed as "K-Trusted Suppliers" in the December strategy, entered the institutionalization phase with the Defense Semiconductor Act enacted last month. The law establishes legal grounds for supporting designated defense semiconductor companies through private contracts and priority purchasing. The scope of mandatory domestic semiconductor application remains under development—replacing existing foreign semiconductors with domestic products may require weapon system design changes and repeat reliability testing, potentially impacting development and force deployment schedules. Subsequent system design will specify mandatory application scope for new weapon systems versus performance improvement projects, and whether identical standards apply to export-oriented weapon systems.
FAQ
Why did South Korea mandate domestic semiconductors in defense systems?
South Korea's defense semiconductor import dependency reached 99%, creating national security vulnerabilities. The government approved the localization strategy at the 11th Science and Technology Ministers' Meeting on the 23rd to establish domestic production capacity and reduce reliance on foreign suppliers through mandatory application of verified domestic semiconductors in weapon systems.
What budget did South Korea allocate for defense semiconductor development?
The government allocated 635.5 billion won from 2025 to 2031 for full-cycle technology development covering materials, design, processes, and systems. An additional 195 billion won was designated from 2025 to 2034 for production facilities, initially focusing on prototype production and small-batch mass production systems centered on public fabs including ETRI and Korea Institute of Nanotechnology.
