In a significant move to enhance its technological capabilities, South Korea has announced a comprehensive industrial strategy focused on artificial intelligence and semiconductor production. This initiative, led by President Lee Jae Myung, aims to secure the country's leadership in the rapidly evolving AI sector. The announcement was made during a televised address, where the president emphasized the urgency of the initiative, framing it as a race against time to establish dominance in the AI boom. The strategy includes substantial investments from major companies and the government, totaling over $1 trillion, to develop new chip fabrication sites and AI data centers.
The plan involves collaboration with the world's largest memory chipmakers, Samsung Electronics and SK Hynix, which are set to invest approximately 800 trillion won ($518 billion) alongside their suppliers to establish two new chip fabrication facilities in the southwestern region of South Korea. Additionally, local investments from the city of Gwangju and South Jeolla province are expected to range between 5 trillion to 20 trillion won ($3.2 billion to $13 billion). The government has also earmarked 81 trillion won ($52.5 billion) for a chip-packaging cluster near Seoul, further solidifying its commitment to the semiconductor industry.
In conjunction with these efforts, the South Korean government plans to construct AI data centers, backed by 550 trillion won ($356 billion) in investments from major corporations such as SK Group, GS Group, and Naver. Science Minister Bae Kyung-hoon announced that by 2035, an additional 10-gigawatt AI data center will be built, with total investments exceeding 18.4 gigawatts and 1,000 trillion won ($648 billion). This ambitious plan is part of a broader strategy to align South Korea's AI and chip ambitions with President Lee's goal of reducing regional disparities and revitalizing economies outside the Seoul metropolitan area.
However, the initiative has faced criticism from opposition parties, who argue that the decision to establish a second semiconductor cluster in Honam, a region that traditionally supports Lee's liberal Democratic Party, is politically motivated rather than based on industrial logic. Critics claim that the government is pressuring memory chipmakers to invest in this region to gain political support, rather than allowing companies to select the most commercially viable locations for their operations. Despite these criticisms, President Lee has defended the proposed southwestern chip hub, highlighting the area's untapped power resources as a key factor in the decision-making process.
