South Korea Unveils $880 Billion National AI Strategy: Semiconductors, Physical AI, and Data Centers – Three Core Areas to Lead

South Korean President Lee Jae-myung today (June 29) unveiled an unprecedented national AI strategy at the Blue House, designating semiconductors, physical AI, and data centers as the "three axes," and vowing to maintain South Korea's leading position in AI chips. Led by Samsung Electronics and SK Hynix, the corporate sector will invest at least 1,350 trillion won ($880 billion) in chips and data centers, with the government adding over 200 trillion won in R&D.
(Previous Context: Jensen Huang dined with Samsung and Hyundai leaders on fried chicken, triggering a frenzy in Korea's "chicken meme stocks")
(Background Supplement: Jensen Huang's speech: In the AI era, "questions" are 10,000 times more valuable than answers; don't use Excel to calculate ROI; Physical AI will break limits)

Table of Contents

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• Three-Axis Strategy: Betting Chip Advantages on AI
• 4 Fabs Plus 18.4GW Data Centers
• Jensen Huang's GPUs Already in the Pipeline

Key Takeaways

• Lee Jae-myung announced the AI national strategy on June 29, with three axes being semiconductors, physical AI, and data centers, vowing to maintain chip leadership
• Led by Samsung and SK Hynix, companies will invest at least 1,350 trillion won ($880 billion), with the government adding 200 trillion won in R&D
• Samsung and SK Hynix will spend 800 trillion won to build 4 fabs, with Samsung choosing Gwangju; data centers target 18.4GW by 2035

South Korean President Lee Jae-myung today (June 29) held a rather impactful press conference at the Blue House, aiming to bet the entire memory chip advantage on a national AI mobilization. According to Bloomberg, the strategy's goal is clearly stated: to maintain South Korea's leading position in the AI era.

Three-Axis Strategy: Betting Chip Advantages on AI

Lee described this plan as South Korea's "great leap forward," with its core being three axes: semiconductors, physical AI, and data centers. Physical AI, simply put, embeds AI capabilities into physical devices like robots, cars, and factories, allowing AI not just to run in the cloud but to move in the real world.

The scale of funding lives up to the term "national strategy." The corporate sector, including Samsung Electronics and SK Hynix, will invest at least 1,350 trillion won, approximately $880 billion, all directed at chips and data centers. South Korea is strong in memory chips, but chips are just the upstream; what this strategy really aims to do is extend the advantage from "selling chips" to "using chips."

4 Fabs Plus 18.4GW Data Centers

Breaking it down, Samsung and SK Hynix will invest 800 trillion won (about $518.3 billion) to build two fabs each in southwestern South Korea, totaling four fabs. Samsung has already selected Gwangju as the new chip cluster. For data centers, SK Group, GS Group, and Naver will invest 550 trillion won, targeting to raise the total national data center capacity to 18.4 GW by 2035.

South Korea also passed a five-year national technology blueprint, committing to invest over 200 trillion won (about $130 billion) in government-funded R&D by 2030. Physical AI has been designated a national strategic industry, with the goal of making South Korea one of the top three global AI robot powers. This list covers the entire AI industry chain—from upstream fabs to midstream data centers to downstream robots—almost encompassing it all.

Jensen Huang's GPUs Already in the Pipeline

The strategy naturally includes NVIDIA, led by Jensen Huang, which has agreed to supply 260k high-end GPUs to the South Korean government and four major groups by 2030. This deal is worth up to 14 trillion won, about $9.8 billion. It's worth noting that this GPU agreement was actually finalized last year (October 2025) when Jensen Huang visited Korea and had fried chicken with Samsung and Hyundai leaders; this national strategy merely integrates it into a larger framework.

The supply recipients are clearly prioritized: the Ministry of Science and ICT, and then Samsung Electronics, Hyundai Motor, SK Group, and Naver. Among them, Hyundai Motor Group will receive about 50k Blackwell GPUs, used for mobility, smart factories, and automotive semiconductors; SK Group will build an AI factory with over 50k NVIDIA GPUs and also establish Asia's first industrial AI cloud; Naver Cloud will expand with over 60k GPUs.

While U.S. export controls block top-tier GPUs from entering China, South Korea has secured a priority supply of 260k GPUs—this in itself is a form of taking sides.

Frequently Asked Questions

How large is South Korea's AI national strategy?
South Korea's corporate sector (including Samsung and SK Hynix) will invest at least 1,350 trillion won, approximately $880 billion, in chips and data centers, with the government adding over 200 trillion won (about $130 billion) in R&D. The core is the three axes: semiconductors, physical AI, and data centers.

What is Physical AI?
Physical AI refers to embedding AI capabilities into physical devices such as robots, cars, and factories, allowing AI to not just run in the cloud but to act in the real world. South Korea has designated it a national strategic industry, aiming to become one of the top three global AI robot powers by 2030.