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South Korea Backs AI, Chip Sectors With $7 Billion Pledge

Seoul is desperate to retain its world-leading role in semiconductors as AI takes chip development on to the next level

South Korean President Yoon Suk Yeol speaks during an interview with KBS at the Presidential Office in Seoul, South Korea, February 4, 2024. The Presidential Office/Handout via REUTERS/File Photo Purchase Licensing Rights
South Korean President Yoon Suk Yeol at the Presidential Office in Seoul, South Korea, on February 4, 2024. Photo: Reuters


South Korea is to pump nearly $7 billion into developing its artificial intelligence sector as it bids to retain its world-leading role in cutting-edge semiconductor chips.

The announcement, made by South Korean President Yoon Suk Yeol on Tuesday, also includes a separate $1.4 billion fund to foster AI semiconductor firms, and comes with Seoul trying to keep up with countries like the United States, China and Japan that are also providing massive policy support to chip supply chains on their own turf.

Semiconductors are a key foundation of South Korea’s export-driven economy. In March, chip exports reached their highest in 21 months at $11.7 billion, or nearly a fifth of total exports shipped by Asia’s fourth-largest economy.

“Current competition in semiconductors is an industrial war and an all-out war between nations,” Yoon told a meeting of policymakers and chip industry executives on Tuesday.


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By earmarking investments and a fund, South Korea plans to significantly expand research and development in AI chips such as artificial neural processing units (NPUs) and next-generation high-bandwidth memory chips, the government said in a statement.

South Korean authorities will also promote the development of next-generation artificial general intelligence (AGI) and safety technologies that go beyond existing models.

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 system semiconductor market by 2030.

“Just as we have dominated the world with memory chips for the past 30 years, we will write a new semiconductor myth with AI chips in the next 30 years,” Yoon said.


  • Reuters with additional editing by Sean O’Meara


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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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