South Korea Announces Over $576 Billion Investment Plan for AI and Semiconductor Industries

Seoul. South Korea has announced a massive investment plan of over 576 billion US dollars to further strengthen its global leadership in the artificial intelligence (AI) and semiconductor industries. President Lee Jae-myung announced the plan on Monday, calling it a historic step for the country's AI and chip industry.

This plan has been brought with the aim of expanding South Korea's AI and chip production capacity as well as accelerating the economic development of areas outside the capital Seoul.

The heads of two of the world's largest memory chip manufacturers, Samsung Electronics and SK Hynix, were also present during the announcement. 'We must establish control over the fundamental technologies of AI faster than any other country. Semiconductors, physical AI, and AI data centers are the three main pillars of our future rapid economic leap,' Lee said.

According to President Lee, Samsung and SK Hynix will invest 800 trillion won (approximately 517.9 billion dollars) in collaboration with their suppliers. Under this, both companies will build two new state-of-the-art chip production centers (fabs) each in the southwestern region of South Korea. In addition, the city of Gwangju and South Jeolla Province will invest between 5 to 20 trillion won. An additional 81 trillion won is expected to be invested for the construction of a chip packaging cluster in the Chungcheong region near Seoul.

Currently, most of South Korea's advanced chip industries are concentrated in the Yongin and Pyeongtaek regions. Mentioning that the production capacity of these areas is almost fully utilized, Ali said that new production centers need to be expanded in the southwestern region. According to him, it will be easier to build large industrial infrastructure in that region due to the availability of ample electricity.

High-bandwidth memory (HBM) chips produced by Samsung and SK Hynix are currently considered extremely important for the development of global AI systems. Such chips are widely used in high-capacity AI models, data centers, and supercomputers. South Korea has adopted a strategy to further strengthen its semiconductor industry amidst intense competition in AI technology worldwide.