From Agence France-Presse via France 24, June 29:
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.
AFP looks at what has driven South Korea's boom, and where it could be heading:
Sky-high profits
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.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.
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.
"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.
Soaring prices for memory and storage chips are being passed on to consumers, with Apple hiking the cost of MacBooks and iPads this month.
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.
Chinese competition
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.With China in particular racing to develop its tech industry, Seoul sees the boom period as a "one-time opportunity" to close the gap, said Lian Jye Su, a chief analyst at Omdia....
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