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South Korea
This Week in AsiaEconomics

How South Korea’s AI megaprojects aim to ‘maintain edge’ over China, meet demand

The goal faces potential hurdles, however, including workers’ reluctance to relocate away from Seoul and dispersed supply chains

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South Korean President Lee Jae Myung holds hands with Samsung Electronics chairman Lee Jae-yong (right) and SK Group chairman Chey Tae-won (left) after announcing the government’s AI and semiconductor megaprojects in Seoul on Monday. Photo: EPA
Park Chan-kyong
South Korea’s US$518 billion semiconductor push aims to transform the artificial intelligence boom into a durable industrial advantage and keep up with leading rival China, according to observers.

The plan is intended to secure supplies of advanced memory chips needed for AI data centres and computing infrastructure, while easing pressure on the Seoul metropolitan area by creating a second major chipmaking base in the country’s southwest.

President Lee Jae Myung on Monday unveiled the government’s “Three Mega Projects” initiative – centred on semiconductors, AI data centres and physical AI such as robotics and autonomous systems – as part of a strategy to turn South Korea into a global technology powerhouse.
Under the plan, Samsung Electronics and SK Hynix will invest a combined 800 trillion won (US$518.5 billion) in the southwestern region to establish a second major semiconductor production hub alongside the emerging Yongin semiconductor cluster near Seoul.

Separately, SK Group, GS Group, Naver and other companies are set to also invest a total of 550 trillion won by 2029 to build large-scale AI data centres nationwide.

The government said it would support the initiative by providing essential infrastructure, including power, water and industrial sites, and plans to offer discounted electricity rates for AI data centres.

“These megaprojects represent South Korea’s efforts to maintain its technological edge in semiconductors over China and other competitors,” said Park Jae-guen, a semiconductor expert at Hanyang University.

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