South Korea is poised to invest about $7 billion in artificial intelligence by 2027, aiming to become a global leader in advanced semiconductor production, according to President Yoon Suk-Yeol.
As the headquarters of Samsung and SK Hynix, leading producers of memory chips including High-Bandwidth Memory (HBM) chips used in artificial intelligence equipment,
South Korea sees semiconductor manufacturing as a cornerstone of its export-driven economy. During a meeting on Tuesday, President Yoon informed political officials and top tech executives that his government aims to make the country a leader in AI chip production.
Yoon emphasized, according to a presidential statement, "It is not an exaggeration to say that the future of the semiconductor industry depends on artificial intelligence."
He added, "We will invest 9.4 trillion won ($6.94 billion) in artificial intelligence and AI semiconductor chips by 2027," in addition to a separate fund of 1.4 trillion won ($1 billion) "to support the growth of innovative companies in AI semiconductor technology."
Semiconductors are the backbone of the global economy, used in a wide range of products from kitchen appliances to mobile phones, cars, and weaponry.
The demand for advanced chips powering sophisticated artificial intelligence systems has surged, driven by the success of generative AI programs like GPT and others.
Seoul, along with Tokyo, the United States, and European countries, is ramping up local chip production amid geopolitical concerns surrounding Taiwan, one of the world's leading chip producers, and the competition between Washington and Beijing.
Currently, NVIDIA, based in the United States, dominates the production of AI chips, with SK Hynix supplying High-Bandwidth Memory (HBM) chips to them.
Yoon stressed during Tuesday's meeting that South Korea aims to become a global leader "in artificial intelligence technology, going beyond memory chips to penetrate the future market for AI chips."
He viewed the current competition regarding semiconductors as an industrial and comprehensive war among nations.
Yoon's stance came a day after U.S. officials announced that Taiwan Semiconductor Manufacturing Company (TSMC), a Taiwanese semiconductor giant, agreed to build a semiconductor plant in Arizona, marking its third such facility and bringing its total investment in the United States to $65 billion.
Earlier this month, Japan announced grants of up to $3.9 billion for a chip project as part of a plan to revive its semiconductor industry.
For years, China has been encouraging its domestic chip sector to reduce reliance on Western technology, especially amid U.S. restrictions on exporting most advanced chips to Beijing.
Semiconductors are South Korea's top exports, reaching $11.7 billion in March, the highest level in two and a half years.
This amount accounted for about 20% of South Korea's total exports, according to data released by the Ministry of Trade.
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