South Korea has announced a massive investment of USD 7 billion in artificial intelligence (AI) by 2027. Yoon Suk Yeol, the president of South Korea, made this announcement in addition to outlining plans for a separate USD 1 billion fund to support South Korean AI semiconductor manufacturers.

The investment and the fund are part of South Korea's plans to significantly expand research and development in AI chips such as artificial neural processing units (NPUs) and next-generation high-bandwidth memory chips. South Korean authorities will also promote the development of next-generation artificial general intelligence (AGI) and safety technologies that go beyond existing models.

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Semiconductors are a key foundation of South Korea's export-driven economy. In March, chip exports reached their highest in 21 months at USD 11.7 billion, or nearly a fifth of total exports shipped by Asia's fourth-largest economy. The country is home to some of the top semiconductor companies in the world, such as Samsung and SK Hynix, including the premium high-bandwidth memory (HBM) used in the hardware that powers AI.

President Yoon Suk Yeol stated, "It is no exaggeration to say that the future of the semiconductor industry depends on AI,". He further added that the current competition in semiconductors is both an industrial war and an all-out war between nations. Yoon has set a target for South Korea to become one of the top three countries in AI technology, including chips, and take a 10% or more share of the global semiconductor market by 2030.

Objectives of the Investment

This strategic move is aimed at bolstering the country's semiconductor industry and retaining its leading global position in cutting-edge semiconductor chips. Here are the key objectives of this investment:

Strengthening Global Position

The investment is part of South Korea's efforts to retain its leading global position in cutting-edge semiconductor chips. Semiconductors are the backbone of South Korea's export-driven economy, with chip exports surging to a 21-month high of $11.7 billion in March.

Promoting AI Technology

The country aims to lead the world in AI technology, including chips. The investment will significantly expand research and development in AI chips such as artificial neural processing units (NPUs) and next-generation high-bandwidth memory chips.

Competing with Global Powers

The investment comes as South Korea tries to keep abreast with countries like the United States, China, and Japan that are also giving massive policy support to strengthen semiconductor supply chains on their turf.

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