South Korea has laid out plans for at least $880bn (£666bn) of investments in chip manufacturing and artificial intelligence – a move President Lee Jae-myung described as a matter of 'survival' for the country. The announcement, made alongside the leaders of Samsung and SK Hynix, the nation's two largest chipmakers, is part of what Lee called the Three Mega Projects to develop new chip production hubs, data centres and robotics technology.
"We must secure the core elements of AI faster than any other country," Lee said in a televised event on Monday. "Semiconductors, physical AI, and AI data centres are the triple axis for a great leap forward." The plan aims to rejuvenate economies outside the capital Seoul, where most advanced factories are currently concentrated. Lee earlier warned that the project was needed to address the decline in rural areas caused by the concentration of industries in Seoul. "Now, we must break this long-standing cycle of discrimination and marginalisation – not only for the sake of justice and equity, but also to ensure sustainable and inclusive growth," he wrote in a statement.
“South Korea announces at least $880bn investment in chips and AI to address regional decline and keep pace with rivals.”
The investment comes as regional rivals Taiwan, China and Japan are pouring money into chip factories and other technologies, driven by the AI boom's surge in demand for semiconductors. US tech giants including Google, Amazon and Meta have said they will spend $650bn on the technology this year. Samsung and SK Group, which count Nvidia among their customers, have been major beneficiaries of this spending spree. SK Hynix's stock market valuation topped $1tn in May, driven by the boom in AI data centres.
The global shortage of semiconductors – exacerbated by soaring demand for chips to power AI – has pushed prices higher. Last week, Apple and Microsoft raised prices on some of their devices, citing higher component costs. Yet some investors have voiced concerns about the immense sums flowing into AI, triggering share slides in recent days.