TL;DR:
- South Korea’s strong presence in the memory chip market gives it an advantage in the global AI chip race.
- The country aims to be one of the top three AI powerhouses by 2027, following the U.S. and China.
- Samsung Electronics and SK Hynix, two major South Korean chipmakers, are investing heavily in AI research and development.
- The government is supporting AI semiconductor development with significant funding and infrastructure plans.
- South Korea’s thriving local AI ecosystem and partnerships with industry leaders contribute to its competitive position.
- Rebellions, a South Korean AI chip design startup, seeks to challenge U.S. chip giants with superior performance.
Main AI News:
South Korea, known for its dominant position in the memory chip market, is poised to capitalize on its strength and establish itself as a global leader in the AI chip race, according to industry observers. The country’s robust artificial intelligence ecosystem, coupled with its expertise in memory chips, positions it favorably in the rapidly evolving field of AI.
Memory chips play a crucial role in AI, as they enable high-performance processing and storage capabilities. James Lim, a senior research analyst at Dalton Investments, highlights South Korea’s advantage, stating, “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.“
Driven by its ambitious “digital strategy,” South Korea aims to secure a place among the top three AI powerhouses worldwide by 2027, closely trailing the United States and China. Jong-ho Lee, the country’s Minister for Science and Information and Communications Technology, affirms South Korea’s commitment to maintaining its leading position in the memory semiconductor field. He emphasizes that South Korea aspires to emerge as a prominent player in AI semiconductors, particularly in rapidly expanding domains.
The advent of large language models, such as ChatGPT, has revolutionized the adoption of AI globally. These models rely heavily on high-performance memory chips to retain information from past conversations and user preferences, enabling them to generate responses that closely resemble human speech. Generative AI, encompassing text, image, and code generation, has witnessed tremendous advancements.
Acknowledging the significance of semiconductor chips for AI operations, Lee underscores the fierce competition among global companies to develop optimized, high-performance, and energy-efficient AI semiconductors. To enhance their capabilities in this realm, South Korean companies have made substantial investments in research and development. Industry giants Samsung Electronics and SK Hynix, two of the world’s leading dynamic random-access memory chipmakers, have demonstrated their commitment to AI advancement.
Samsung’s plans to invest a staggering 300 trillion Korean won ($228 billion) in a new semiconductor facility within South Korea reflect their determination to catch up and maintain their leadership position. Samsung’s dedication to technological advancements, coupled with its extensive resources, positions them favorably in the competitive landscape.
Data from research firm TrendForce reveals that Samsung held a market share of 40.7%, followed by SK Hynix at 28.8% during the fourth quarter of 2022. Micron secured the third position with a market share of 26.4%. Memory chips find applications not only in AI but also in computers, smartphones, and tablets as storage devices.
South Korea’s flourishing local AI ecosystem, which can rival global tech giants, provides a solid foundation for the country’s ambitions. Sung Nako, Executive for Large Scale AI Development at South Korean internet giant Naver, affirms the nation’s capabilities. This ecosystem serves as a nurturing ground for innovation and bolsters South Korea’s position in the AI chip market.
Sam Altman, CEO of OpenAI, has encouraged South Korea to take the lead in AI chip production. During his meeting with South Korean President Yoon Suk-yeol in June, Altman expressed his interest in investing in South Korean startups and collaborating with major chipmakers like Samsung Electronics. Dalton’s Lim asserts that the absence of U.S. chip giants Nvidia and Intel in the memory business provides South Korea with a notable advantage.
Samsung’s role as a supplier of high bandwidth memory chips to Nvidia further strengthens South Korea’s position. These chips are integrated into Nvidia’s latest A100 graphics processing units, which play a pivotal role in training ChatGPT. Geoffrey Cain, author of “Samsung Rising,” suggests that Samsung’s focus on logic chips, including AI chips, positions them favorably for future applications of semiconductor technology.
Recognizing the transformative potential of AI, the South Korean government is heavily investing in this domain. In 2022, the Ministry of Science and Information Technology (MSIT) announced funding of 1.02 trillion won ($786 million) for AI semiconductor research and development over the next five years. Minister Lee highlights the profound impact of AI on various industries, including digital sectors like cloud computing and the metaverse, as well as traditional sectors such as manufacturing and logistics. Lee anticipates even greater economic ripple effects with the wider adoption of AI.
To consolidate its position in the AI chip industry, South Korea plans to allocate 826.2 billion won through 2030 to establish high-end chip infrastructure, including data centers, in collaboration with startups. The minister affirms that South Korea possesses a competitive advantage in the memory chip sector and foundry capabilities. He emphasizes the country’s commitment to developing world-class AI semiconductor technology by leveraging its memory semiconductor expertise and fostering a pool of AI semiconductor experts.
South Korean AI chip design startup Rebellions, in its pursuit to challenge U.S. chip giants, claims that its new chip outperforms Nvidia’s equivalent graphics processing units by more than three times in terms of AI workload, energy efficiency, and cost efficiency. Seoul’s drive to support local companies has prompted Rebellions to vie for government contracts, signaling a surge in entrepreneurial activities and investor interest in the region.
JP Lee, CEO and Managing Partner at SoftBank Ventures Asia, highlights the growing number of founders starting companies in South Korea and the government’s support in backing these startups. With OpenAI’s ChatGPT serving as a catalyst, South Korea is poised to emerge as a prominent player in the AI chip industry.
South Korea’s relentless pursuit of AI dominance, coupled with its established memory chip dominance, positions it as a formidable contender in the global AI chip race. As the country invests heavily in AI research and development and fosters a thriving ecosystem, it is well-positioned to achieve its goal of becoming one of the world’s top AI powerhouses by 2027.
Conclusion:
South Korea’s dominance in the memory chip market, combined with its commitment to AI research and development, places it in a strong position to become a leading player in the global AI chip industry. With significant investments, a robust local ecosystem, and partnerships with key industry players, South Korea has the potential to achieve its goal of becoming one of the top three AI powerhouses by 2027. This represents significant opportunities for the market, with South Korean companies poised to contribute to the advancements in AI technology and drive economic growth in various sectors.
