South Korea has made a huge decision regarding the future of its hi-tech production strategy.
On Monday, President Lee Jae Myung made an announcement alongside the leaders of the country’s two biggest chipmakers, Samsung and SK Hynix.
The announcement revealed an $880bn chip and AI investment plan.
The funding covers $518 billion for a new southwest chip hub, $356 billion for AI data centres, as well as additional allocations for advanced packaging and regional infrastructure.
Within the specifics of the plan, both Samsung and SK Hynix plan to build multiple new facilities in the new hub outside of the capital city of Seoul.
Both Samsung and SK Hynix have expressed interest in the new hub.
The country aims to secure production of all the physical elements of AI before any other country: “Semiconductors, physical AI, and AI data centres”
In addition to the funds from the private companies, the state will also be providing utility infrastructure and tax incentives.
The new hub is part of the President’s pledge to prop up rural areas, as the disparity in business between them and Seoul becomes more and more pronounced.
With regard to the vision, President Lee explained that the aim of this new investment is to secure production of all the physical elements of AI before any other country: “Semiconductors, physical AI, and AI data centres”.
Building this infrastructure, such as state-of-the-art semiconductor fabs requires reliable infrastructure and vast amounts of resources, both material and human.
The new site will need access to huge amounts of electricity, water, supplier reach and skilled labour.
Choosing the site of the new hub will be a huge decision. Gwangju, in the southwest, is currently being considered by Samsung and SK. Samsung told Reuters that this is “because of expected government support for electricity, water, workforce development and living conditions”.
