The government is set to embark on a joint development and commercialization project for K-on-device AI semiconductors worth 1 trillion won, aimed at boosting the growth of the AI semiconductor industry and expanding the use of domestic Neural Processing Units (NPUs) in the public sector. To facilitate this, the government plans to swiftly enact a semiconductor special law and begin the project in March. Over the next five years, this initiative will focus on developing domestic AI semiconductors to be used in advanced products like autonomous vehicles, smart appliances, and humanoid robots.
<>Government Strategy for Fostering AI Semiconductor Industry
On the 11th, Kim Jeong-kwan, the Minister of Trade, Industry, and Energy, unveiled the government’s strategy for fostering the AI semiconductor industry during a “Core AI Semiconductor Enterprise Growth Strategy Forum”. The forum was attended by domestic AI semiconductor companies, such as FuriosaAI, Telechips, Rebellion, DeepX, Mobilint, and HyperExcel, along with experts from academia and industry. Minister Kim shared the concern that if the dominance of global players in the AI semiconductor market continues, it could narrow the growth path for domestic companies.
In response, the government plans to launch the “M.AX (Manufacturing AI Transformation) Alliance”, which will connect research and development (R&D), proof-of-concept, mass production, and market expansion. This alliance aims to strengthen the domestic AI semiconductor industry’s competitiveness and establish a foundation for global competition.
<>K-on-device AI Semiconductor Joint Development Project
The government plans to officially launch the “K-on-device AI Semiconductor” joint development and commercialization project in March. The core objective of this project is to develop domestic AI semiconductors for use in various advanced products, including autonomous vehicles, smart appliances, and humanoid robots. The project aims to strengthen demand creation and enhance collaboration between companies. Moreover, the government will also focus on expanding the use of Neural Processing Units (NPUs) in the public sector, with plans to support this through the enactment of the Semiconductor Special Law.
One of the critical issues in the growth of the domestic AI semiconductor industry is the promotion of fabless companies. These companies often face difficulties accessing foundries (semiconductor contract manufacturing). To address this, the Ministry of Industry will form a Semiconductor Manufacturing Support Task Force (TF) within the M.AX Alliance, aimed at enhancing support for prototype production using advanced processes. Furthermore, the government is considering establishing an ecosystem for coexistence foundries based on legacy processes in the medium-to-long term.
The government also plans to enhance financial and fiscal support for the growth of the AI semiconductor industry. The Ministry of Industry will establish a 2 trillion won semiconductor special fund within the year, as well as create an investment fund dedicated to fabless companies. This funding is designed to help domestic fabless companies overcome difficulties in securing capital and ensure smooth financial support for technology development and production expansion.
In addition, the government will focus on training AI semiconductor design talent by expanding specialized graduate schools in regions outside of Seoul. This is aimed at improving the geographical concentration of semiconductor talent and ensuring the development of industry-ready professionals who can be immediately utilized in the field.
Minister Kim emphasized the importance of AI semiconductors, stating, “In the age of AI, semiconductors are a core strategic asset that simultaneously determines industrial competitiveness and national security.” He added that it is crucial for demand companies, fabless companies, foundries, intellectual property (IP) companies, and the government to work together as an alliance to unlock opportunities in global competition. The goal is to establish a foundation for the growth of the AI semiconductor industry and enhance South Korea’s competitiveness in the global market.
The AI semiconductor industry presents a significant opportunity for domestic companies. The government’s M.AX Alliance will accelerate R&D and commercialization, actively promoting the AI semiconductor market. The project, focused on developing domestic AI semiconductors for advanced technologies such as autonomous vehicles, smart appliances, and humanoid robots, will offer domestic companies a crucial chance to strengthen their competitiveness in the global market.
The government's 1 trillion won “K-on-device AI semiconductor” joint development project is expected to be a turning point in enhancing the competitiveness of South Korea’s AI semiconductor industry and expanding its global presence. By creating demand and fostering collaboration among companies, this project will play a significant role in developing essential AI semiconductor technologies for future industries like autonomous vehicles, smart appliances, and humanoid robots.
Moreover, the government plans to stimulate the growth of fabless companies and ensure ongoing financial support and talent development, laying the groundwork for the sustained growth of the AI semiconductor industry. The collaboration between the government and industry stakeholders will likely result in substantial achievements, positioning South Korea as a leader in the global AI semiconductor market.
