The shifting role of the state in South Korea’s industrial and technological development : a review of the semiconductor industry

Due to a weak industrial base coupled with devastation from the Korean War, South Korea was a latecomer in industrialization, and formal economic development began during the 1960s under heavy state intervention. Within this broader context of industrial development, this research examines the role of state in the development of South Korea’s semiconductor industry. The results show that government support for semiconductors has gradually shifted from full-fledged intervention through both initial technology procurement and commercialization during the 1960s, to a minimal role of developing human capital and promoting private sector investment in R&D at present. But despite the importance of adhering to principles of free trade, the Hynix crisis of 2003 and the recent economic crisis of 2008 demonstrate the continued importance of the government’s role in protecting and promoting strategic industries such as semiconductors.