The South Korean government intends to launch a ₩1 trillion ($843.9 million) initiative to make the country the world’s artificial intelligence (AI) semiconductor hub. The project also aims to increase the region’s electronic components manufacturing capability.
Seoul will facilitate the program by providing funding to local companies and institutions through 2029.
In May, South Korea revealed AI and 5G related technological development would drive its post-coronavirus economic recovery efforts.
South Korea’s $841.9 Million AI Chip Project
South Korea’s Ministry of Trade, Industry, and Energy will contribute ₩521.6 billion ($439.1 million) to the initiative through 2026. In addition, the country’s Ministry of Science and ICT (Information and Computer Technology) has earmarked ₩488 billion ($410.8 million) for the program over the next ten years.
South Korean administrators have enlisted 91 businesses, 29 universities, and eight research institutions to work on its semiconductor development project. Seoul is interested in addressing the world’s need for chips that enable innovation in cutting-edge fields like biotechnology, Internet of Things (IoT) enabled home appliances, and smart vehicles.
The East Asian republic’s initiative represents a huge financial commitment from a country still recovering from the coronavirus. However, if its project succeeds, the resources it is expending now will be more than justified. According to Korea Business, the global AI chip market will be worth $51.9 billion by 2025.
Part of a Larger Trend
By announcing its semiconductor development project, South Korea has now joined a larger electronic components industry trend.
Recently, China, India, Taiwan, the United States, and other counties have unveiled programs designed to support their local ICs sectors. As digitalization has emerged as a major force in the 21st-century global economy, technological advancement has become a priority for many regions. However, the trend accelerated following two watershed events: the U.S.-China trade war and the coronavirus pandemic.
Taken together, the commerce conflict and global health crisis highlighted significant flaws in the worldwide semiconductor supply chain. Because electronic components outsourcing has become less dependable and more expensive, countries have realized the value of having domestic chip design and manufacturing infrastructure.
Technology’s role in business operations and public life in the post-pandemic era is becoming increasingly prominent.
Accordingly, nation-states currently taking a proactive approach to advancing their local semiconductor industries will be tomorrow’s technological leaders. Because of its new initiative, South Korea is unlikely to fall behind in the modern version of the Space Race.