Korea’s Tech Giants Invest Heavily in AI Chip Development
JoongAng Ilbo – 2025.12.18 07:26
South Korea’s leading tech companies, Samsung Electronics and SK Hynix, are substantially increasing their investments in the development of artificial intelligence (AI) chips, aiming to reduce reliance on foreign technology and establish a stronger foothold in the rapidly growing AI market.
Samsung Electronics announced yesterday a ₩20 trillion ($15 billion) plan to develop next-generation AI chips over the next five years. The investment will focus on both the design and manufacturing of high-performance AI semiconductors, targeting applications in data centers, autonomous vehicles, and mobile devices. A key component of Samsung’s strategy is the development of chiplet technology, allowing for greater flexibility and scalability in chip design.
SK Hynix is also accelerating its AI chip development efforts, with a planned ₩18 trillion ($13.5 billion) investment over the same period. The company is concentrating on High Bandwidth Memory (HBM) chips, crucial for powering advanced AI models.SK Hynix aims to become the world’s leading supplier of HBM chips, capitalizing on the increasing demand from AI companies like Nvidia.
The moves come amid growing concerns over supply chain vulnerabilities and geopolitical tensions, particularly regarding access to advanced semiconductor technology. The South Korean government has pledged to provide substantial support to the industry, including tax incentives and research funding.
“The AI chip market is poised for explosive growth, and securing a domestic supply chain is critical for our national competitiveness,” stated a spokesperson from the Ministry of Science and ICT. “We are committed to fostering a thriving AI semiconductor ecosystem in Korea.”
Industry analysts predict that the competition in the AI chip market will intensify in the coming years, with companies worldwide vying for dominance. However, they beleive that Samsung and SK Hynix are well-positioned to become major players, leveraging their existing expertise in semiconductor manufacturing and their strong relationships with key customers.
Economic Outlook for 2024: Global and Korean Perspectives
The outlook for the coming year, both domestically and internationally, presents a mixed picture. While global trade growth is slowing due to shifts in the international trade environment and uncertainties like the potential for an AI bubble,factors such as easing monetary policies and expansionary fiscal measures suggest the global economy will likely grow around 3%,a slight decrease from this year. The U.S.Federal Reserve projects a 2.3% growth rate for the U.S. economy. Despite potential price pressures from tariffs, a notable fiscal deficit (estimated at 6% of GDP due to tax cuts), and the possibility of challenges in U.S. Treasury bond issuance or an AI bubble-fueled lending surge, the U.S. economy is expected to be supported by a robust stock market and increased consumption driven by AI-led digital innovation. Even noted pessimist Nouriel Roubini anticipates a “goldilocks” scenario – not too hot,not too cold – for the U.S.
The forecast for the Korean economy is comparatively more optimistic. the recovery observed in the latter half of this year is projected to continue into next year, fueled by a semiconductor super cycle, a rebounding construction sector, and a recovery in consumer spending. Rising house prices,coupled with fiscal expansion and a strong domestic stock market (showing the highest growth rate among major countries),are expected to stimulate consumption. Some institutions predict a growth rate exceeding 2% for the Korean economy next year.
However,this improvement must be viewed within a broader context. korea’s economic growth this year was the lowest among OECD nations, and even achieving potential growth next year would still result in a rate significantly below the global average. This suggests a gradual decline in Korea’s economic standing,a trend that has been ongoing for some time. While a decline in growth rate is typical as income levels rise, Korea’s rate of decline is steeper than that of other advanced economies, with signs of “premature aging” appearing at a per capita income of $30,000.