Attention is focused on the impact of President Lee Jae-myung on the semiconductor corporations, which are the largest export industry in Korea and have high growth potential in the age of artificial intelligence (AI). During his presidential campaign, President Lee presented a key pledge of 100 trillion won in investments and securing 50,000 graphics processing units (GPUs). He also visited the domestic AI semiconductor design corporation, FuriosaAI, demonstrating his commitment to nurturing domestic AI semiconductors. Considering these pledges and actions, there are predictions that the new government will actively foster the semiconductor industry.
However, it is noted that one limitation is the lack of substantial alternatives to the 52-hour workweek system, which is cited as one of the causes of the gap in research and development (R&D) capabilities between domestic corporations and competitors like the United States and Taiwan.
There is a negative perspective that President Lee's semiconductor pledges are largely similar to what the Democratic Party proposed during last year's general election and that most have not been fulfilled, indicating a possibility of remaining mere 'empty promises.'
◇ Lee emphasizes AI and semiconductor investments as key pledges
On the 4th, examining President Lee's presidential campaign promises, he set a goal to enter the 'top three AI powerhouse nations.' In response to fierce global technological competition, the government has a strategy of directly leading the industrial ecosystem, and the industry is paying attention to the feasibility.
To achieve these goals, the Lee Jae-myung administration plans to strengthen the presidentially-run 'National Artificial Intelligence Committee' significantly and establish an 'AI policy chief' in the presidential office to create a policy control tower. Funding for this will come from a 100 trillion won national fund involving citizens, corporations, the government, and pension funds. This funding is expected to be heavily invested in establishing a 'K-cloud' based on domestic AI semiconductors. By designating AI data centers as the next-generation social overhead capital (SOC) and buying domestic chips in large quantities, the government aims to provide stable initial markets and 'testing grounds' for domestic fabless corporations like FuriosaAI.
The ultimate goal of these hardware support policies is to nurture a 'K-NVIDIA,' as emphasized multiple times by President Lee. This plan aims to secure AI semiconductor sovereignty by cultivating representative domestic corporations equipped with independent technology and ecosystems, similar to NVIDIA, which dominates the global AI semiconductor market. To this end, President Lee has also proposed measures such as establishing a 'semiconductor special law,' a production tax credit of up to 10%, supporting next-generation AI semiconductor R&D, and creating an RE100 semiconductor cluster.
Not just hardware, but plans for expanding the software and service ecosystem have also been presented. President Lee aims to develop a national representative large language model (LLM) and provide it as open source, while also creating an 'AI testbed' to be one of the first globally to trial new AI services, thereby securing technological sovereignty and simultaneously invigorating the industry.
These extensive support measures from the new government resonate with the industry's demands that have long complained about infrastructure shortages. In particular, AI data centers require enormous power and advanced cooling technologies, making it difficult to possess global competitiveness without national support, according to a common sentiment among domestic industries. In fact, global big tech firms such as OpenAI, Microsoft, and Google are reportedly pouring $100 billion (about 138 trillion won) annually just for next-generation AI model training.
◇ R&D constraints and lack of subsidies face negative evaluations
However, there are concerns that several challenges must be overcome before this blueprint leads to tangible results. The industry points out that without flexible operational measures such as exceptions for R&D personnel under the '52-hour workweek law', considerable investment effects may be diminished.
A person surnamed Kim, connected to the domestic AI semiconductor industry, stated, 'Developing AI technology requires total immersion 24/7, but key research personnel in domestic corporations are constrained by physical time limits.' They added that 'the government's plan to create the best infrastructure while opposing exceptions for the R&D sector is akin to preparing a top-tier racing car while tying the driver's hands and feet.'
Unlike semiconductor competitors such as the United States, Japan, and Taiwan that provide active tax incentives and subsidies to attract foreign corporations for their advanced fabs, most of the pledges like K-NVIDIA and K-cloud remain focused on building foundational strength, which has been criticized as not meeting global standards. An unnamed university professor explained, 'The government-led cultivation of domestic AI and semiconductor industries has already shown clear limitations throughout decades of history,' emphasizing the importance of attracting investments from globally leading companies at the forefront of technology to diversify the ecosystem.
There are assertions that the semiconductor special law and tax incentives proposed by President Lee are not sufficient inducements to attract domestic investments from Samsung Electronics and SK hynix. Previously, President Lee promised to apply a maximum 10% production tax credit to semiconductors produced and sold domestically and expand tax benefits. However, this remains significantly insufficient compared to the cash support that the U.S., Japan, and others have actively rolled out, including tax credits, investment funds, and subsidies.
A senior official in the semiconductor industry stated, 'If we purely consider investment amounts and expenses, establishing a fab in Korea could cost 50% more than building one in Japan.' They added, 'This is why TSMC and other corporations are constructing large factories in Japan, while Samsung Electronics and SK hynix have excluded establishing factories in Japan from their options considering public sentiment. However, if investment costs or labor issues continue to arise, the burden on domestic investments will inevitably increase.'