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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 international AI chip race, mentioned trade observers.
“South Korea may be very sturdy in reminiscence chips. AI does require quite a lot of reminiscence. South Korea dominating within the reminiscence market is unquestionably a bonus,” mentioned James Lim, senior analysis analyst at Dalton Investments.
South Korea is aiming to change into one of many world’s high three AI powerhouses by 2027, following carefully behind the U.S. and China, in response to the nation’s “digital technique.”
The nation’s minister for science and knowledge and communications expertise, Jong-ho Lee, advised CNBC the nation “goals to take care of its main place within the reminiscence semiconductor discipline.”
“South Korea seeks to emerge as a distinguished participant in quickly rising and promising areas similar to AI semiconductors,” mentioned Lee.
Massive language fashions similar to ChatGPT — which brought on international 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 a view to generate humanlike responses.
![Our A.I. chip is optimized exclusively for A.I. computation, says South Korean startup](https://image.cnbcfm.com/api/v1/image/107237910-16836029231683602920-29371051641-1080pnbcnews.jpg?v=1683606756&w=750&h=422&vtcrop=y)
Generative AI is a kind of synthetic intelligence that may generate content material similar to textual content, photographs, code and extra.
“To ensure that the usage of AI, together with ultra-large language fashions, a major variety of semiconductor chips are required to function, and international 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 gained ($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 expertise, to allow them to proceed to take care of their management place.”
We’ll spare no effort to assist Korea safe world-class AI semiconductor expertise 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%. Reminiscence chips are additionally utilized in computer systems, smartphones and tablets as storage gadgets.
“South Korea has a sturdy native AI ecosystem, able to competing with international tech giants,” mentioned Sung Nako, government for big scale AI improvement at South Korean web big Naver.
ChatGPT maker OpenAI’s CEO Sam Altman had urged South Korea to steer 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 have no publicity within the reminiscence house,” mentioned Dalton’s Lim, including that this is able to 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 models that prepare ChatGPT.
Geoffrey Cain, writer of the 2020 guide “Samsung Rising,” advised CNBC final month that he sees Samsung “diving deeper into the logic chip phase. So, [that’s] the AI chips, the long run functions for semiconductor expertise.”
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 gained ($786 million) of funding for AI semiconductor analysis and improvement over the subsequent 5 years.
“AI not solely drives the expansion of digital industries similar to cloud computing and metaverse but in addition serves as a key consider dramatically enhancing productiveness in conventional industries similar to manufacturing and logistics,” Lee advised CNBC.
“With AI being utilized throughout numerous domains, even higher financial ripple results can now be anticipated,” he mentioned.
South Korea may even allocate 826.2 billion gained by 2030 to construct high-end chips by new knowledge facilities and dealing with startups.
In a press launch final month, the minister mentioned that “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 expertise by leveraging our reminiscence semiconductor capabilities to advance AI semiconductors in phases by 2030, creating extra to use them to knowledge facilities, and fostering AI semiconductor consultants,” he mentioned within the launch.
![Investors are showing a 'high interest' in backing A.I. startups in South Korea, VC firm says](https://image.cnbcfm.com/api/v1/image/107254778-16865426111686542608-29849039838-1080pnbcnews.jpg?v=1686544635&w=750&h=422&vtcrop=y)
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 thrice.
“By way of AI workload, we’ve got a lot better vitality effectivity, value 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 likewise quite a lot of traders, with the assist from the federal government, exhibiting a excessive curiosity in backing these startups,” mentioned JP Lee, CEO and managing companion at SoftBank Ventures Asia, on CNBC’s “Road Indicators Asia.”
— CNBC’s Katie Tarasov contributed to this report.
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