South Korea also wants to take part in the global race for AI chips and sees itself in a good starting position thanks to its dominance of memory chips.
• South Korea aims for world-class AI semiconductor technology
• Memory chip dominance could be an advantage
• South Korea already has a robust AI ecosystem
South Korea has defined in its “digital strategy” that it wants to become one of the world’s three leading AI strongholds by 2027, close behind the USA and China. Now, Minister of Science and Information and Communication Technology Jong-ho Lee has confirmed to CNBC that the tiger is striving to maintain its leading position in memory semiconductors and establish itself as a major player in fast-growing and promising areas such as AI semiconductors.
“AI is not only a growth driver for digital industries like cloud computing and the Metaverse, but also serves as a key enabler for dramatic productivity improvement in traditional industries like manufacturing and logistics,” Lee further told CNBC, adding, “By deploying AI in diverse fields, even greater economic ripple effects can now be expected.”
In June, the minister said in a press release that “every effort will be spared to help Korea achieve world-class AI semiconductor technology by 2030 by using our storage semiconductor capabilities to gradually improve AI semiconductors and apply them to data centers and nurture AI semiconductor experts.”
Memory chip dominance
Its dominance of the memory chip market gives the country an advantage in the global race for AI chips, industry insiders say: “South Korea is very strong in memory chips. AI requires a lot of memory. South Korea’s dominance of the memory market is definitely an advantage,” James Lim, senior research analyst at Dalton Investments, quoted CNBC as saying.
Thus, domestic concerns Samsung Electronics and SK hynix are two of the world’s leading manufacturers of dynamic random access memory chips (DRAM). As reported by CNBC, citing data from research firm TrendForce, Samsung held a 40.7 percent market share and SK hynix a 28.8 percent share in the fourth quarter of 2022, followed by US company Micron in third place with 26.4 percent. On the other hand, “US chip giants like NVIDIA and Intel […] not active in the storage market. They don’t have any storage activities,” Lim explained. He believes this gives South Korea an advantage.
“To utilize AI, including ultra-large language models, a significant number of semiconductor chips are required, and global companies are fiercely competing to develop high-performance and energy-efficient AI semiconductors optimized for AI calculations,” Secretary Lee also emphasized the importance of high-performance memory chips for generative AI models.
Robust artificial intelligence ecosystem
Market observers see the robust ecosystem for artificial intelligence in the land of the morning calm as a further advantage: “South Korea has a robust local AI ecosystem that is able to compete with global technology giants,” said Sung Nako, executive for the development of large-scale AI at South Korean internet giant Naver.
Further efforts are planned in the coming years. The South Korean Ministry of Science and Information and Communications Technology (MSIT) had already announced in 2022 that it would make 1.02 trillion won (about 786 million US dollars) available for research and development of AI semiconductors over the next five years.
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