Seoul: South Korea has introduced a new strategy focusing on artificial intelligence, aiming to transition from its manufacturing strengths to a leadership role in technology.

According to Yonhap News Agency, this strategy is centered around achieving "AI semiconductor supremacy" and involves an estimated 700 trillion won ($476 billion) in private investment projected through 2047.

The plan includes the construction of 10 new semiconductor fabrication plants and an increase in domestic production capacity to 7.9 million wafers per month. The government has allocated 1.27 trillion won for AI chip research and development, and 620 billion won for packaging and compound semiconductors. Additionally, there is a focus on reducing dependency on foreign materials by supporting local suppliers through various programs.

Seoul's initiative also proposes the establishment of a Southern Innovation Belt connecting Busan, Gwangju, and Gumi, to distribute talent and production beyond the Seoul metropolitan area. This move is intended to ease the geographic concentration in chipmaking and support regional development.

However, two major challenges remain. The proposed Yongin chip cluster in Gyeonggi Province will require 15 gigawatts of power at full operation, equivalent to over 10 nuclear reactors. The strategy lacks specific plans for power generation, transmission routes, and environmental approvals, raising concerns about the feasibility of sustained operations.

Another issue is labor policy. The existing 52-hour workweek, upheld by the National Assembly, poses limitations for advanced chip design and development, which often require extended work periods. This constraint could hinder Korea's ability to compete with China's expanding semiconductor campaign and the US's adjusted export controls, which affect market decisions for Korean companies reliant on both economies.

South Korea's financial resources, industrial capabilities, and engineering talent position it to influence the future of the global semiconductor industry. However, overcoming power and labor challenges is crucial for closing the gap between its manufacturing legacy and AI ambitions. The country's ability to address these constraints will determine the success of its technological leadership goals.