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Chip industry suffers manpower shortage

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Samsung struggling to stop brain drain

By Yoon Sung-won

Korea's semiconductor industry is suffering a lack of human resources, largely due to an outflow of engineers abroad, according to industry sources Tuesday.

The intensifying manpower shortage may seriously undermine the global competitiveness of the country's semiconductor manufacturing and equipment device makers over the long run.

On Friday, Samsung Electronics Vice Chairman Kwon Oh-hyun, who also heads Samsung Display, requested the government to provide more support for the semiconductor industry to tackle its manpower problem.

"Our semiconductor industry is considered to be capable of making its own way. But we face a serious manpower shortage now," Kwon said during a meeting with President Moon Jae-in alongside other business leaders at Cheong Wa Dae, Friday.

"The semiconductor industry is one of the foundations for the Fourth Industry Revolution. I would like to ask for active government support in providing science and technology training, and fostering promising small- and medium-sized enterprises in the semiconductor materials and equipment industry, ultimately facilitating manpower supply in the semiconductor sector."

During a general meeting of Samsung Electronics shareholders March 24, Kwon pledged to prevent a brain drain to China.

"China's drive to boost its semiconductor industry is considered threatening from the long-term perspective," he said. "We will expedite technology development and take extra care not to lose our technologies and human resources."

According to data from the Financial Supervisory Service, Samsung Electronics had about 45,000 employees at its semiconductor business, while Korea's No. 2 chipmaker SK hynix had 22,600 workers as of the first quarter of this year. Their average period of service was 10.2 years at Samsung and 10.9 years at SK hynix.

Korea's semiconductor companies have introduced diverse measures to retain talented and experienced workers. They have offered extra incentives and lessened obligations that employees had to follow when they look for new job opportunities in the domestic market.

However, such measures have proven insufficient to deal with China's aggressive drive in the semiconductor sector as the country plans to pour over 200 trillion won into the industry.

China's Tsinghua Unigroup has pledged to become one of the world's top five memory chipmakers by 2020. To achieve this goal, it pledged to invest about $30 billion in building a memory plant in Nanjing earlier this year. In March last year, it announced a plan to pour in $24 billion won to establish a memory chip factory in Wuhan. The company is concentrating on NAND Flash memory chips to secure global competitiveness.

However, China will need extra time and effort to secure workers to run semiconductor manufacturing facilities. This is why many Chinese enterprises seeking to hire experienced and talented Korean workers, promising high salaries.

"Backed by ample funding, Chinese enterprises have been more than willing to spend a lot in attracting talented Korean semiconductor experts," an industry source said.

"From the Korean workers' perspective, they have no reason to refuse such attractive proposals considering they find it more difficult to find second job opportunities in Korea."



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