South Korea — For more than a year, artificial intelligence has been the trendiest issue in an array of businesses. Midjourney and ChatGPT are two of the most divisive AI programs to date, attracting both pros and casual users. As a result, big corporations have altered their attention to profit on artificial intelligence.
South Korea has increased its attempts to become the top option for AI chips due to the direct relationship between AI and technology. South Korea has all the advantages required to win the global AI chip race, according to industry analysts. It is already one of the dominant giants in the memory chip market and has established one of the most inventive AI ecosystems today.
The country’s strength and targets
According to the Asian country’s digital plan, they want to be one of the world’s top three AI powerhouses by 2027, trailing only the United States and China. Dalton Investments’ senior research analyst, James Lim, highlighted how South Korea might surge to the forefront of the modern era.
“South Korea is very strong in memory chips. AI does require a lot of memory. South Korea dominating in the memory market is definitely an advantage.”
South Korea’s minister of science, information, and communications technology, Jong-ho Lee, stated that the government wants to maintain its leadership position in memory semiconductors.
“South Korea seeks to emerge as a prominent player in rapidly growing and promising areas such as AI semiconductors,” said Lee.
The global hype
Large language models have created a significant demand for high-performance memory devices in the months after ChatGPT’s meteoric rise. Generative AI is a cutting-edge field of artificial intelligence that creates material such as text, graphics, and code, to mention a few examples.
The chips enable generative AI models to remember the bulk of facts from previous exchanges, as well as to record user preferences in order to provide near-human answers.
“In order for the use of AI, including ultra-large language models, a significant number of semiconductor chips are required to operate,” said Lee. “And global companies are competing fiercely to create high-performance and low-power AI semiconductors optimized for AI computation.”
The firms leading the way
Samsung Electronics and SK Hynix are two South Korean companies that have established themselves as the world’s top manufacturers of dynamic memory chips. In order to improve their capabilities, the companies have been actively investing in AI research and development.
Samsung announced plans in March to invest 400 trillion Korean won ($228 billion) in the development of a new semiconductor factory in South Korea. According to SemiAnalysis’ Dylan Patel, Samsung is investing a lot of money.
“And why is that? So they can catch up on technology, so they can continue to maintain their leadership position,” said Patel.
Lee elaborated on the matter, saying: “We will spare no effort to help Korea secure world-class AI semiconductor technology by leveraging our memory semiconductor capabilities AI semiconductors.”
According to TrendForce statistics, Samsung had a market share of 40.7% in the fourth quarter of 2022, while SK Hynix had a market share of 28.8%.
“South Korea has a robust local AI ecosystem, capable of competing with global tech giants,” said Sung Nako of South Korean internet titan Naver.
During a meeting with President Yoon Suk-yeol in June, OpenAI CEO Sam Altman encouraged South Korea to take charge of AI chip manufacturing. Altman also expressed a desire to invest in South Korean businesses. He also contemplated collaborating with well-known chipmakers such as Samsung Electronics.
“US chip giants Nvidia, Intel – they are not involved in the memory business,” Lim noted, implying that it would give South Korea a higher advantage. “They don’t have any exposure in the memory space.”
In comparison to Nvidia, Samsung is renowned as a supplier of greater bandwidth memory chips. The author of “Samsung Rising,” Geoffrey Cain, envisions the South Korean business diving deeper into the logic chip sector.
A greater advantage
The South Korean government has shown its support for the project by spending extensively in AI. The MSIT announced in 2022 that it will invest 1.02 trillion won ($786 million) over the following five years to finance AI semiconductor research and development.
“AI not only drives the growth of digital industries such as cloud computing and metaverse, but also serves as a key factor in dramatically improving productivity in traditional industries, such as manufacturing and logistics,” said Lee. “With AI being applied across various domains, even greater economic ripple effects can now be anticipated.”
South Korea is also committing 862.8 billion won through 2030 to the development of high-end semiconductors through new data centers and collaboration with entrepreneurs. The minister stated last month that the economic and industrial importance of AI semiconductors will continue to rise. He also stated that the country has a significant edge in the foundry and memory chip sectors.
“We will spare no effort to help Korea secure world-class AI semiconductor technology by leveraging our memory semiconductor capabilities to advance AI semiconductors in stages by 2030, developing additional to apply them to data centers, and fostering AI semiconductor experts,” said the minister in a June press release.
Meanwhile, Rebellions, a South Korean AI chip design company, increased its attempts to compete with US chip makers, saying that its new chip exceeded performance benchmarks, outperforming Nvidia’s counterpart by more than three times.
Park Sung-hyun, the CEO and co-founder of Rebellions, described the chip, saying, “In terms of AI workload, we have much better energy efficiency, cost efficiency… sometimes better performance.”
Rebellions is also said to be chasing government contracts as Seoul seeks to strengthen local firms.