South Korea to invest $7 billion in AI to retain chip edge

South Korean President Yoon Suk Yeol has announced that the country will invest 9.4 trillion won (US $6.94 billion) in artificial intelligence by 2027 in a bid to stay on top of semiconductor chip competition.

The funding, which will also include a separate 1.4 trillion won (US $1 billion) investment into the country’s AI semiconductor firms, will aim to give South Korea an edge over other countries such as Taiwan, China, Japan, and the US which are also injecting billions into manufacturing the chips on their own land.

For instance, in less than 24 hours since this latest announcement the US president, Joe Biden, granted Taiwanese chip manufacturer, TSMC, $6.6 billion to build three factories in Arizona.

Also, at the end of last year, Japan allocated an extra $13.3 billion to its domestic semiconductor industry, while China is reportedly raising more than $27 billion for its chip fund this year.

For South Korea, semiconductors contribute significantly to its economy. In March, chip exports reached $11.7 billion, a fifth of its total exports.

“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 in the announcement.

The money will go towards expanding research and development in AI chips such as artificial neural processing units (NPUs) and next-generation high-bandwidth memory chips.

Additionally, South Korean authorities will support the development of next-generation artificial general intelligence (AGI) and safety technologies.

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The South Korean president has set a target for the country to become one of the top three countries in AI technology including chips, with the aim to take a 10% share of the global 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.

He also said that although the recent earthquake in Taiwan caused a limited impact on South Korean companies, the country has ordered thorough preparation in the event of uncertainties.