South Korea Commits $6.8B to Boost AI Chip Development, Production

President Yoon Suk Yeol announced new support as he wants South Korea to become a top AI and chip nation

Ben Wodecki, Jr. Editor

April 11, 2024

3 Min Read
A green and gold semiconductor being held along by a white gloved hand
Getty images

The Republic of Korea will invest $6.8 billion by 2027 to boost the country’s AI chip sector.

South Korea President Yoon Suk Yeol announced plans to provide financial support to local semiconductor efforts, including the formation of a $1 billion fund to “help innovative AI chipmakers grow.”

Yoon announced the funding plans at a meeting he chaired on chip-related issues attended by officials from local semiconductor firms.

At the April 9 meeting, Yoon expressed his ambition for South Korea to be in the top three nations in the world for AI technology and to produce more than 10% of global semiconductors by 2030.

"To set up an all-out response system that rises to the level of that for a wartime situation, we will review all proposals to attract semiconductor industries starting with investment incentives," Yoon said. "We will comprehensively compare and analyze the investment climates and support systems of key countries to devise bold assistance customized for our country's circumstances."

Korea joins a growing list of nations looking to obtain a larger slice of the semiconductor market after water shortages and the pandemic halted chip production in Taiwan in 2020, leading to a global hardware shortage.

Just last week, the Taiwan Semiconductor Manufacturing Company committed to expand its production efforts in Arizona. Following that announcement, the Commerce Department said the U.S. is on track to produce 20% of the world’s chips by 2030.

To help South Korean efforts, the local government is funding construction of a semiconductor “mega cluster” a chip production base that would bring together chip manufacturers and equipment manufacturers as well as research and development labs in one centralized location.

The site will be built in Gyeonggi-do Province and will cost $454 billion.

Yoon said the government will provide electricity and industrial water for the site. His administration recently passed a bill to expand the nation's power grid to support the project.

South Korea is home to some of the largest chip manufacturers in the world, including SK Hynix and SK Square. Samsung also announced plans last year to build the world’s largest chip plant on the outskirts of the capital Seoul.

Earlier this month, the Korean government formed a supreme council on AI strategy.

The group of AI experts from the private sector and government ministries will draft AI policy proposals covering industries including semiconductors and human resources.

Minister of Science and Information and Communication Technology, Lee Jong Ho and Taejae University President Yeom Jaeho serve as the council’s co-chairs.

At the council’s launch event, minister Lee said the Korean government would invest $519 million to achieve Yoon’s ambition for the country to be in the world's top three AI countries.

A group of men in suits and glasses sat in a line with microphones in front of them

"We will also quickly implement policy actions to boost digital capacity and technological advancement for AI innovation,” Lee said.

In May, the South Korean capital Seoul will host the next AI Safety Summit following the inaugural event that took place in the U.K. last November.

"At the summit, world leaders and CEOs of major companies will discuss our proposals for global AI standards,” Lee said.

About the Author(s)

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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