South Korea’s dominance in memory chips an advantage in A.I. race

Industry watchers said South Korea’s dominance in the memory chip market and its robust AI ecosystem gives it an edge in the global AI chip race.

“South Korea is very strong in the field of memory chips. Artificial intelligence requires a lot of memory. South Korea’s dominance in the memory market is definitely an advantage,” said James Lim, senior research analyst at Dalton Investments.

South Korea aims to become one of the world’s top three AI powers by 2027, closely following the United States and China, according to the nation.digital strategy. “

The country’s Minister of Science and ICT, Chung Ho Lee, told CNBC that the country “aims to maintain its leading position in the field of memory semiconductors.”

“South Korea is striving to emerge as a prominent player in promising, fast-growing fields such as semiconductors for artificial intelligence,” Lee said.

Large language paradigms such as ChatGPT – which have caused global AI to explode in recent months – are increasingly in need of high-performance memory chips. These chips enable generative AI models to remember details from past conversations and user preferences in order to generate human-like responses.

Generative AI is a type of artificial intelligence that can generate content such as text, images, code, and more.

“In order to use AI, including very large language models, a large number of semiconductor chips need to be powered on, and global companies are fiercely competing to create high-performance, low-power AI semiconductors optimized for AI computations,” Li said.

Samsung Electronics and South Korea’s SK Hynix are two of the world’s largest DRAM chip makers, and have actively invested in AI research and development to enhance their capabilities.

Samsung said in March that it plans to invest 300 trillion Korean won ($228 billion) in A New semiconductor facility in South Korea.

Data from research firm TrendForce It showed that Samsung captured a market share of 40.7% and SK Hynix captured 28.8% in the same period in the fourth quarter of 2022, followed by Micron in third place with 26.4%. Memory chips are also used in computers, smartphones, and tablets as storage devices.

“South Korea has a strong domestic AI ecosystem, capable of competing with global tech giants,” said Song Nako, executive director of large-scale AI development at South Korean internet giant Naver.

Sam Altman, CEO of OpenAI, the maker of ChatGPT, urged South Korea to lead the production of AI chips during his meeting with South Korean President Yoon Sok-yeol in June. Altman has also expressed interest in investing in South Korean startups and partnering with major chipmakers such as Samsung Electronics.

American chip giants Nvidia, Intel – Do not participate in memory work. “They don’t have any supply in the memory space,” said Dalton Lim, adding that this would give South Korea an advantage.

Samsung is the supplier of high-bandwidth memory chips nvidiawhich fits on the US chipmaker’s latest A100 GPUs that train ChatGPT.

Jeffrey Cain, author of the 2020 book “Samsung Rising,” told CNBC last month that he sees Samsung “diving deeper into the logical chip segment. So, (these are) AI chips, future applications of semiconductor technology.”

In 2022, the MSIT said it will allocate 1.02 trillion won ($786 million) to fund AI semiconductor research and development. over the next five years.

“AI is not only driving the growth of digital industries such as cloud computing and metaverse, but also serving as a key factor in significantly improving productivity in traditional industries such as manufacturing and logistics,” Lee told CNBC.

“With the application of AI in various fields, greater economic impacts can now be expected,” he said.

South Korea too Allocating 826.2 billion won through 2030 To build advanced segments through new data centers and work with startups.

in Press release last month“The economic and industrial value of AI semiconductors will continue to improve and Korea has the upper hand in the memory chip (sector) and foundry,” the minister said.

“We will spare no effort to help Korea secure world-class AI semiconductor technology by leveraging our memory semiconductor capabilities to develop AI semiconductors in phases by 2030, develop add-ons to apply to data centers, and enhance intelligence semiconductor experts.” artificial.” Release.

In a bid to challenge the US chip giants, South Korean AI chip design startup Rebellions has claimed that its new chips have exceeded performance benchmarks, outperforming equivalent Nvidia GPUs by more than three times.

“In terms of AI workload, we have better energy efficiency, cost effectiveness…and sometimes even better performance,” Rebellions co-founder and CEO Park Sung-hyun told CNBC in May.

rebellions The race to win government contracts is said to be on Where Seoul aims to promote its local companies.

JB Lee, CEO and Managing Partner of SoftBank Ventures Asia, said on CNBC’s “Street Signs Asia.”

— CNBC’s Katie Tarasoff contributed to this report.