{"id":68541,"date":"2026-06-29T12:41:15","date_gmt":"2026-06-29T12:41:15","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/68541\/"},"modified":"2026-06-29T12:41:15","modified_gmt":"2026-06-29T12:41:15","slug":"one-time-opportunity-south-korea-bets-big-on-ai-boom","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/68541\/","title":{"rendered":"‘One-time opportunity’: South Korea bets big on AI boom"},"content":{"rendered":"

<\/a> South Korea aims to join the United States and China as one of the world’s top AI powers (Pedro Pardo) <\/p>\n

Huge demand for the components that power artificial intelligence presents South Korea with an opportunity to bolster its chip industry against rivals such as China, analysts say. <\/p>\n

Seoul announced huge private-public investments on Monday totalling nearly $1.2 trillion — equivalent to more than two-thirds of South Korea’s GDP — for new semiconductor factories and AI data centres. <\/p>\n

AFP looks at what has driven South Korea’s boom, and where it could be heading: <\/p>\n

– Sky-high profits – <\/p>\n

Three companies dominate the global market for producing advanced memory chips that help power AI systems: US giant Micron, and South Korea’s Samsung Electronics and SK hynix. <\/p>\n

These chips, called high-bandwidth memory (HBM), are used in AI processors alongside the powerful silicon known as GPUs that are made by the likes of California’s Nvidia, the world’s most valuable company. <\/p>\n

Their profits and share prices have soared to dizzying heights as governments and tech companies plough hundreds of billions of dollars into training and running AI tools. <\/p>\n

“AI has not only provided big demand, it has also created shortages, and that has driven price escalation,” Jim Handy, semiconductor expert at Objective Analysis, told AFP. <\/p>\n

Soaring prices for memory and storage chips are being passed on to consumers, with Apple hiking the cost of MacBooks and iPads this month. <\/p>\n

The boom has also fuelled worker demands over pay packages, with Samsung averting a major strike in May by agreeing a deal on bonuses with its largest union. <\/p>\n

– Chinese competition – <\/p>\n

South Korea has pledged to triple spending on AI this year, aiming to join the United States and China as one of the world’s top AI powers. <\/p>\n

With China in particular racing to develop its tech industry,\u00a0Seoul sees the boom period as a “one-time opportunity” to close the gap, said Lian Jye Su, a chief analyst at Omdia. <\/p>\n

“Its the perfect time” for South Korea to leverage its strategic advantage and make investments as “the AI boom might die down” and demand could regress, he told AFP. <\/p>\n

The Financial Times reported on Saturday that Apple is seeking to buy memory chips from Chinese manufacturer CXMT — a company poised to benefit from shortages, along with Taiwanese rivals. AFP has approached Apple and CXMT for comment. <\/p>\n

Although Chinese firms benefit from lower labour costs and big domestic demand, there could be limits to the country’s tech growth, Su said. <\/p>\n

“People are less keen to… (become) overly reliant” on Chinese silicon, a factor that Korean vendors such as Samsung now want to “double down on”. <\/p>\n

– Innovation imperative – <\/p>\n

Established Asian chipmakers can capitalise on the AI boom partly because they remain innovative, Handy said. <\/p>\n

“This gives them profitability that helps to produce a moat between them and smaller firms” that cannot maintain the same level of spending and research investment, he said. <\/p>\n

Omdia’s Su added that, with Monday’s announcements, South Korean chipmakers want to use their current abundant cash to help diversify their offerings. <\/p>\n

That can help them avoid becoming too dependent on the current hot sector — memory chips — in what economists call a “Dutch disease”, referring to the negative effect of a temporary upswing in the price of one commodity. <\/p>\n

– Boom or bubble? – <\/p>\n

The head-spinning speed of growth in the sector — Samsung’s share price has risen more than 430 percent over the past year, with SK hynix’s up 770 percent — has raised concern over how long the AI boom can last. <\/p>\n

Some analysts such as Su are optimistic that demand will stay buoyant, given the deepening integration of AI tools into business operations. <\/p>\n

For memory chips, “there’s little to stop price rises until they impact end markets”, Handy said. <\/p>\n

“If prices rise too high then markets move to another technology or disappear altogether,” he said. <\/p>\n

“We’re not there yet.” <\/p>\n

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