South Korea Invests $950 Billion in AI Chip Production

South Korea revealed over the past weekend deals for the production of chips and computing power for AI totaling $950 billion, led by local tech giants SK Hynix and Samsung, designed to address the global shortage in the field. According to Reuters, the SK Group signed deals totaling $750 billion, including a half-trillion-dollar deal between memory chip maker SK Hynix and Nvidia for the supply of next-generation memory chips and the joint development of memory chips for training and running AI models. The deal includes the construction of a 2-gigawatt data center, which will be based on Nvidia's Vera Rubin processors and SK Hynix memory chips, and is expected to begin operating next year.

Samsung signed a memorandum of understanding with Broadcom for a $200 billion deal, which includes the production of memory chips and the joint development of AI processors based on Samsung's memory chips and the South Korean company's sub-2-nanometer manufacturing technology. Together with the American company Micron, the three companies are the world's leading manufacturers of advanced memory chips, which are currently in high demand in AI data centers. The resulting shortage also affects the availability of memory chips for the consumer market and leads to price increases for products such as smartphones, computers, and tablets.

South Korean President Lee Jae-myung said on Friday at a conference in San Francisco that the country will lead the way to an important era of partnerships with international technology companies, with the goal of creating a "dynamic AI ecosystem." SK Chairman Chey Tae-won said that AI companies require much more memory than previously anticipated, and estimated that memory demand for the next five years will be even higher than currently expected.

"I wouldn't be surprised if the next time I see Nvidia CEO Jensen Huang, he tells me that the current forecasts are too low, and says, 'I want more'," said Chey.