In a decisive move to position South Korea at the forefront of the global AI revolution, President Lee Jae Myung has unveiled an ambitious industrial strategy aimed at semiconductor chip production and artificial intelligence advancements. During a recent address, Lee emphasized the urgency of this initiative, highlighting the need for South Korea to swiftly secure critical components of AI development ahead of other nations.
Joined by executives from the leading memory chip manufacturers, Samsung Electronics and SK Hynix, President Lee characterized the plan as a significant advancement in technology, organized around a "triple axis" framework encompassing semiconductors, physical AI, and data centres.
Minister of Industry Kim Jung-kwan revealed that the two major chipmakers, along with their suppliers, will inject 800 trillion won (approximately $518 billion) into the establishment of two new chip fabrication facilities in the southwestern part of the country. Additionally, local governments in Gwangju and South Jeolla province are expected to contribute between 5 trillion and 20 trillion won ($3.2 billion to $13 billion) to these ventures. Further investment, amounting to around 81 trillion won ($52.5 billion), is anticipated for developing a chip-packaging hub in the Chungcheong area, close to Seoul.
The government has also announced plans to set up AI data centres in this region, backed by a substantial investment of 550 trillion won ($356 billion) from prominent companies like SK Group, GS Group, and Naver. Science Minister Bae Kyung-hoon indicated that by 2035, a significant AI data centre with a power capacity of 10 gigawatts will be developed, with total investments surpassing 1,000 trillion won ($648 billion).
This initiative represents the most ambitious effort by the South Korean government to align the country’s aspirations in AI and semiconductor production, coinciding with President Lee's commitment to reduce regional economic disparities and invigorate areas outside the Seoul metropolitan region.
However, the proposal has faced criticism from opposition parties, who argue that establishing a second semiconductor cluster in Honam—an area traditionally supportive of Lee’s Democratic Party—is rooted more in political motivation than industrial necessity. Critics contend that this approach may unduly influence memory chip manufacturers to invest in that region for political favor rather than pursuing the most viable business opportunities.
In defending the choice of the southwestern region for new chip facilities, President Lee stated his commitment to harnessing the area's underutilized energy resources. Over the weekend, he addressed these concerns in a series of posts, asserting that the initiative is not merely a political maneuver, despite the region's strong support during his election campaign, where 85% of voters backed him.
