The Ministry of Trade, Industry and Energy announced on August 14 that it held a pivotal meeting to bolster AI semiconductor competitiveness at Furiosa AI in Gangnam-gu, Seoul. This significant gathering included domestic AI semiconductor suppliers such as fabless companies, design houses, and software firms, alongside demand companies like Hyundai Motor, LG Electronics, and Hanwha Systems, which are actively integrating AI into their core industries. This event marked the first on-site visit by First Vice Minister Park Sung-taek since his inauguration, underscoring its importance.
During the meeting, participants delved into the development and application of high-performance, low-power AI semiconductors, also known as edge semiconductors, tailored to industries such as automotive, home appliances, and defense. This discussion comes at a time when “on-device AI” is becoming increasingly prevalent across all industrial sectors. Participants emphasized that AI integration is crucial for the advancement of key manufacturing industries and noted that South Korea’s semiconductor industry, with its capable design firms, is well-positioned for the growth of the on-device AI industry.
Currently, the AI semiconductor market is dominated by global tech giants like Nvidia, which focus on “server semiconductors.” However, South Korea is seen as having a favorable environment for developing “edge semiconductors” optimized for field applications through collaboration with key industries. This opens up opportunities for new fabless companies to enter the market.
Industry participants proposed several measures to enhance competitiveness, including large-scale R&D projects linked to demand for developing industry-specific AI semiconductors, the establishment of development and production infrastructure, substantial financial support for scaling up fabless companies, and the training of excellent design talent. These measures aim to create a robust ecosystem for AI semiconductor development and application.
Starting next year, the Ministry plans to develop edge semiconductors focusing on seven key industries with high competitiveness, marketability, and growth potential. This initiative will integrate AI with industry and launch projects to create new AI business models. Based on the opinions raised by the industry, the government plans to announce a “Comprehensive Support Plan for the System Semiconductor Industry in the AI Era” in the second half of this year.
To strengthen demand linkage for semiconductor design companies, the government will enhance the operation of the “AI Semiconductor Collaboration Forum,” which includes 11 demand companies from various industries and 31 IP, fabless, design house, and software companies. Based on discussions from the forum, the government will prioritize R&D projects that develop industry-specific edge semiconductors with high market impact and support their verification and actual application in industrial sites. Recognizing the importance of comprehensive functions required by demand companies over individual chip performance, the government plans to create large-scale projects that form a tight-knit cluster including IP, fabless, design houses, and software to produce competitive AI semiconductors and related products and services.
In September this year, the government will open the “System Semiconductor Verification Support Center” in Pangyo, Seongnam, to support design and verification using high-cost equipment essential for AI semiconductor development. Additionally, the “Korea-US AI Semiconductor Center” will be established in Silicon Valley, USA, to support the overseas expansion of fabless companies. The government will expand opportunities for prototype production (MPW) in consultation with foundry companies and increase support for prototype production costs.
Large-scale financial support will be also provided for scaling up and M&A of fabless companies. The government will begin full-scale execution of a 1.1 trillion won (approximately $814 million) semiconductor ecosystem fund in the third quarter of this year, starting with the currently established 300 billion won fund to support the growth of system semiconductor companies.
Moreover, the government will strengthen training programs within universities for nurturing semiconductor design talent and establish new training courses for design engineers who can be immediately deployed in the field. It will also improve conditions for excellent foreign talent to work in domestic fabless companies in consultation with relevant ministries.
“AI semiconductors are poised to be a ‘game change’ in the global semiconductor market,” stated the Ministry of Trade, Industry and Energy. “We are committed to providing comprehensive support measures for the system semiconductor industry in the AI era.” Participants echoed this sentiment, highlighting the necessity of AI integration for the advancement of key manufacturing industries and the favorable conditions in South Korea for the growth of the on-device AI industry.
