The Decline of Korea’s OSAT Industry: Why Doesn’t Korea Have CoWoS?

How the Chaebols’ Obsession with In-House Integration Led to the Collapse of an Ecosystem

1. Introduction — “Korea is a Wafer Powerhouse, but a Packaging Laggard”

Semiconductors consist of four major stages: design, fabrication, packaging, and testing.

Among them, the final stage—packaging (back-end process)—has long been regarded as simple assembly work.

Yet today, as Moore’s Law has effectively reached its limit, the importance of packaging is growing explosively.

At Computex 2025, Jensen Huang, founder and CEO of NVIDIA, stated:

“In the age of AI, advanced packaging is the most important factor.

And right now, the only company that truly excels at it is TSMC.”

His words carry more weight than mere praise.

Advanced packaging now stands at the forefront of semiconductor competitiveness—

and it is precisely in this domain that Korea has fallen far behind.

However, Korea was not behind in packaging from the very beginning.

At one time, Amkor Technology, now known as a global semiconductor packaging giant, was originally a Korean company.

Likewise, STATS ChipPAC Korea, which still maintains a notable presence today,

originated from the semiconductor assembly division of Hyundai Electronics (now SK Hynix).

(Although it has since been acquired by China’s JCET and become a foreign-owned company.)

Then why did Korea’s semiconductor packaging industry lose its own roots?

In this article, I will dissect the current state of Korea’s packaging sector

and trace the causes of its decline through history.