South Korea unveils $1tn chip and AI investment plan
South Korea has announced plans to invest nearly $1 trillion (£760bn) in the coming years to develop the country’s chip manufacturing and artificial intelligence (AI) capabilities.
This is part of the country’s Three Mega Projects, which aim to develop new chip manufacturing centres, data centers and robotics.
The plan aims to boost the economy of regions outside the capital Seoul, President Lee Jae-myung said on Monday.
This comes as regional rivals such as Taiwan, China and Japan invest heavily in chip factories and other technologies as the AI boom increases demand for semiconductors.
“We must secure the core elements of artificial intelligence faster than any other country,” Lee said. “Semiconductors, physical AI, and AI data centers are the triple axes of a great leap forward.”
Lee announced his plans at a televised event alongside leaders of Samsung and SK Hynix, the country’s two largest chipmakers.
The companies are expected to establish a semiconductor manufacturing center in the southwest of the country.
Lee also announced plans to build other AI infrastructure hubs outside Seoul, where most of the country’s advanced factories are concentrated.
Earlier, Lee had said in a statement that the project was a matter of “survival” for the country to address the decline in rural areas due to the concentration of industries in Seoul.
“We must now break this long-standing cycle of discrimination and marginalization, not only in the name of justice and equality, but also to ensure sustainable and inclusive growth,” he wrote.
Samsung and SK Group, which count names such as AI chip giant Nvidia among their customers, are among the biggest beneficiaries of the increase in spending on AI infrastructure.
US technology giants, including Google, Amazon and Meta, said they will spend $650 billion on technology this year.
SK Hynix’s stock market valuation soared above $1 trillion in May, driven by the boom in AI data centers.
Rising demand for chips to power artificial intelligence has led to a worldwide shortage of semiconductors, causing prices to rise.
Last week, Apple and Microsoft increased the prices of some of their devices due to the increase in component costs.
However, some investors have expressed concerns about the large amounts of money being poured into artificial intelligence. Some stocks have been declining lately.
