The landmark Namsan Seoul Tower.
Jung Yeon-je | Afp | Getty Pictures
South Korea’s dominance within the reminiscence chip market and a sturdy synthetic intelligence ecosystem provides it a bonus within the world AI chip race, mentioned trade observers.
“South Korea may be very robust in reminiscence chips. AI does require quite a lot of reminiscence. South Korea dominating within the reminiscence market is certainly a bonus,” mentioned James Lim, senior analysis analyst at Dalton Investments.
South Korea is aiming to turn out to be one of many world’s high three AI powerhouses by 2027, following intently behind the U.S. and China, in line with the nation’s “digital technique.”
The nation’s minister for science and data and communications know-how, Jong-ho Lee, advised CNBC the nation “goals to keep up its main place within the reminiscence semiconductor area.”
“South Korea seeks to emerge as a outstanding participant in quickly rising and promising areas resembling AI semiconductors,” mentioned Lee.
Giant language fashions resembling ChatGPT — which triggered world AI adoption to blow up in latest months — are more and more in want of high-performance reminiscence chips. Such chips allow generative AI fashions to recollect particulars from previous conversations and consumer preferences with the intention to generate humanlike responses.
Generative AI is a sort of synthetic intelligence that may generate content material resembling textual content, pictures, code and extra.
“To ensure that using AI, together with ultra-large language fashions, a major variety of semiconductor chips are required to function, and world firms are competing fiercely to create high-performance and low-power AI semiconductors optimized for AI computation,” Lee mentioned.
Chip giants Samsung, SK Hynix
South Korean corporations Samsung Electronics and SK Hynix are two of the world’s largest dynamic random-access reminiscence chipmakers and have been actively investing in AI analysis and improvement to bolster their capabilities.
Samsung in March mentioned that it plans to take a position 300 trillion Korean received ($228 billion) in a brand new semiconductor facility in South Korea.
Samsung is “spending and spending and spending,” Dylan Patel of analysis and consulting agency SemiAnalysis advised CNBC final month. “And why is that? To allow them to make amends for know-how, to allow them to proceed to keep up their management place.”
We’ll spare no effort to assist Korea safe world-class AI semiconductor know-how by leveraging our reminiscence semiconductor capabilities to advance AI semiconductors…
Jong-ho Lee
Minister for Science and ICT
Knowledge from analysis agency TrendForce confirmed that Samsung held a market share of 40.7% and SK Hynix held 28.8% in the identical interval within the fourth quarter of 2022, adopted by Micron in third place at 26.4%.
“South Korea has a sturdy native AI ecosystem, able to competing with world tech giants,” mentioned Sung Nako, govt for big scale AI improvement at South Korean web large Naver.
ChatGPT maker OpenAI’s CEO Sam Altman had urged South Korea to guide AI chip manufacturing throughout his assembly with South Korean President Yoon Suk-yeol in June. Altman additionally expressed curiosity in investing in South Korean startups and partnering with main chipmakers like Samsung Electronics.
“U.S. chip giants Nvidia, Intel — they don’t seem to be concerned within the reminiscence enterprise. They haven’t any publicity within the reminiscence area,” mentioned Dalton’s Lim, including that this may give South Korea a bonus.
Samsung is the provider of excessive bandwidth reminiscence chips to Nvidia, which match into the U.S. chipmaker’s newest A100 graphics processing items that practice ChatGPT.
Geoffrey Cain, creator of the 2020 e book “Samsung Rising,” advised CNBC final month that he sees Samsung “diving deeper into the logic chip section. So, [that’s] the AI chips, the long run functions for semiconductor know-how.”
An ‘higher hand’
The South Korean authorities is investing closely in AI.
In 2022, the MSIT mentioned it will likely be deploying 1.02 trillion received ($786 million) of funding for AI semiconductor analysis and improvement over the subsequent 5 years.
“AI not solely drives the expansion of digital industries resembling cloud computing and metaverse but additionally serves as a key consider dramatically enhancing productiveness in conventional industries resembling manufacturing and logistics,” Lee advised CNBC.
“With AI being utilized throughout varied domains, even higher financial ripple results can now be anticipated,” he mentioned.
South Korea will even allocate 826.2 billion received by 2030 to construct high-end chips by new information facilities and dealing with startups.
In a press launch final month, “The financial and industrial worth of AI semiconductor will proceed to enhance and Korea has the higher hand within the reminiscence chip [sector] and foundry.”
“We’ll spare no effort to assist Korea safe world-class AI semiconductor know-how by leveraging our reminiscence semiconductor capabilities to advance AI semiconductors in phases by 2030, growing extra to use them to information facilities, and fostering AI semiconductor specialists,” he mentioned within the launch.
In a bid to problem to U.S. chip giants, South Korean AI chip design startup Rebellions claimed its new chip surpassed efficiency requirements, outperforming Nvidia’s equal GPUs by greater than 3 times.
“When it comes to AI workload, now we have a lot better power effectivity, price effectivity … generally higher efficiency,” Rebellions co-founder and CEO Park Sung-hyun advised CNBC in Could.
Rebellions is reportedly racing to win authorities contracts as Seoul goals to bolster its native firms.
“I see quite a lot of — due to OpenAI’s ChatGPT — founders beginning firms within the area, and in addition quite a lot of traders, with the assist from the federal government, displaying a excessive curiosity in backing these startups,” mentioned JP Lee, CEO and managing accomplice at SoftBank Ventures Asia, on CNBC’s “Avenue Indicators Asia.”
— CNBC’s Katie Tarasov contributed to this report.