South Korea to invest $794 million in AI chips, nurture 7,000 experts

The South Korean government has decided to invest 1.02 trillion won ($794 million) in the artificial intelligence semiconductor sector and foster over 7,000 experts to sharpen its competitive edge in the global chip industry.

Following a meeting of government officials and industry executives to discuss the AI chip sector on Monday, Science Minister Lee Jong-ho said the government will actively support domestic companies’ research and development projects in that regard.

“Korea has the potential to dominate the world’s (semiconductor) industry given its competitive edge in the memory chip and foundry businesses,” he said at a meeting held at KAIST's main campus in Daejeon. 

Korea is home to the world’s two largest memory chipmakers – Samsung Electronics Co. and SK Hynix Inc. – accounting for 56% of the $124.5 billion global market.

However, Korean chipmakers take up a mere 3% of the much larger non-memory or system chip market, which is estimated at $272.4 billion.

Minister Lee said the investment to be made over the next five years is aimed at securing a strong foothold in the fledgling next-generation AI chip sector.

TO COMPETE WITH NVIDIA

The government will bolster academic-industrial cooperation programs and promote collaborative research projects with US experts while urging Korean companies to use domestically developed AI chips in data centers, AI services and smart city infrastructure, he said.

AI chips are expected to account for a third of system chips by 2030 globally, according to a state-run research institute.

Semiconductor companies are competing for the lead in the AI chip market as the technology powers the large-scale learning, reasoning, and calculation skills required to execute AI services.

Minister Lee said state-funded projects will focus on the neural processing unit (NPU), neuromorphic and processing-in-memory (PIM) chip sector, in which Nvidia Corp., a US chip designer, is the dominant leader.

With the planned investment, he said the government also hopes to nurture over 7,000 AI chip experts.

A post-pandemic surge in demand for semiconductors, coupled with a prolonged chip shortage, has forced policymakers worldwide to revisit policies for nurturing talent and developing a chip industry ecosystem.

Korea has promoted semiconductors as the backbone of its economy, but is slow to provide infrastructure and build a skilled workforce, critics say.

Write to Seung-Woo Lee at leesw@hankyung.com
In-Soo Nam edited this article.