The Ministry of SMEs and Startups held the “Fabless Challenge” awards ceremony on September 6 at the Four Seasons Hotel in Jongno-gu, Seoul, marking a significant milestone in South Korea’s efforts to bolster its system semiconductor industry. The event brought together domestic foundry companies and fabless startups, aiming to transform the nation’s semiconductor landscape.
The Fabless Challenge, initiated in 2022, is a program designed to strengthen the domestic system semiconductor ecosystem and support promising fabless startups and foundries in achieving innovative results. This year, the program saw the participation of all major domestic foundry companies, including Samsung Electronics, DB HiTek, and SK hynix System IC, expanding from its initial collaboration with only Samsung Electronics’ foundry.
Since last year, the Ministry has been selecting promising fabless companies through the “Super Gap Startup 1000+” project, providing commercialization and R&D funds. The Ministry plans to offer tailored support by categorizing the growth stages of fabless companies into three phases: development, growth, and scale-up, based on business experience and technological capability.
In May this year, President Yoon Suk-yeol announced a comprehensive support program for the semiconductor industry worth 26 trillion won (approximately $20 billion). He emphasized the need for groundbreaking measures to enhance competitiveness, stating, “The market share of the fabless industry remains at 1%, and the foundry sector has not closed the gap with leading companies like TSMC.”
At the awards ceremony, Minister of SMEs and Startups Oh Young-joo highlighted the government’s commitment to the sector. “Relevant ministries are preparing comprehensive support measures centered on fabless companies for the system semiconductor sector. The Ministry will spare no effort to support domestic fabless startups in growing into global unicorn companies,” she said.
DeepX, a fabless startup that produced an AI chip prototype through the 2022 Fabless Challenge and won three innovation awards at CES 2024, presented its success story at the event. Kim Nok-won, CEO of DeepX, shared, “We have developed various products in collaboration with Samsung. We will start mass production by the end of this year and deliver results in the actual market. We will strive to become a global fabless company in return for the support and assistance from the system semiconductor ecosystem.”
This year’s Fabless Challenge selected five companies: ICTK, Qualitas Semiconductor, TruePixel, EMCoreTech, and PowerLSI. These startups will have priority access to the prototype production processes of South Korea’s three major foundry companies. The Ministry will provide each company with 100 million to 200 million won to cover the necessary costs.
Lee Jung-won, CEO of ICTK, expressed his enthusiasm, “We have not had the opportunity to validate our technology until now, but we are excited to have this chance through the Fabless Challenge.”
Kang Seok-chae, Vice President of Samsung Electronics, underscored the importance of the initiative. “Compared to memory semiconductors, the domestic system semiconductor sector still lags behind advanced countries. The Fabless Challenge is a good example of public-private collaboration to foster the system semiconductor ecosystem. We will continue to support small fabless companies by providing opportunities for multi-project wafer (MPW) production and other assistance,” he said.
The Ministry of SMEs and Startups has committed to connecting domestic fabless startups with major foundry companies and providing tailored support at each growth stage to foster these startups. The ultimate goal is to turn domestic fabless companies into global unicorns and boost the system semiconductor sector. While South Korea is a world leader in memory semiconductors, its market share in system semiconductors remains relatively low.
