South Korea launches $7b plan to boost AI chip production

South Korean President Yoon Suk Yeol / Photo credit: Elizabeth Fraser

South Korea’s President Yoon Suk Yeol has announced that the country is targeting to spend 9.4 trillion won (US$6.94 billion) on AI by 2027, aiming to boost local semiconductor production, Reuters reported.

The government plans to boost research and development related to AI chips, a key part of its export-led economy. The focus is on next-generation artificial neural processing units – specialized chips for machine learning applications – and high-bandwidth memory chips.

Semiconductors comprised about one-fifth of the country’s total exports in March, hitting a 21-month peak of US$11.7 billion.

South Korea also aims to encourage advancements in artificial general intelligence, a type of AI that has a level of thinking comparable to humans.

The new strategy includes a US$1 billion fund earmarked entirely to help AI semiconductor companies.

As the world doubles down on AI, other governments like India and Vietnam are also betting big on semiconductors, introducing policies favorable for chip manufacturers to set up local plants.

For instance, India’s first semiconductor fab, a joint venture between local firms Tata and PSMC, is set to begin production in 2026.

The US, China, and Japan are all investing heavily to bolster their semiconductor supplies as well. Separately, Samsung reportedly received over US$6 billion in subsidies from the US to help the South Korean chip leader increase its production in the states.

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