The Ankara Center for Crisis and Policy Studies (ANKASAM) presents its interview with Tom Ramage, Fellow and Economic Policy Analyst at the Korea Economic Institute of America (KEI), on South Korea’s evolving role in the global AI semiconductor supply chain, the impact of its expanding production capacity on global supply chains, and the future of the country’s role in the AI semiconductor ecosystem.
1. What does the recent San Francisco AI Summit indicate about South Korea’s evolving role in the global AI semiconductor supply chain?
More than anything, the recent San Francisco AI Summit indicates that Korea is an indispensable partner for the global roll-out of AI and the AI supply chain. What the summit shows is that, increasingly, the President of Korea is a major figure to consult and meet with for U.S. tech companies as they make plans for AI, owing to Korea’s technical specialization in high-bandwidth memory chips as well as broad ecosystem for tech startups and IoT infrastructure.
The deals and agreements signed to build out data center sites in Korea as well as cooperation for provision of HBM chips from Korea to U.S. companies as well as U.S. GPUs to Korean companies signals that Korea is not only a high-tech market for the widespread adoption of U.S. AI technologies, but also that Korean technology is a support pillar for U.S. AI hardware in itself.
2. How could the expansion of South Korean production affect the resilience and geographical diversification of global semiconductor supply chains?
For one thing, expansion of semiconductor production in Korea, as the Korean government has committed to, would do well to help alleviate a persisting global memory chip shortage, and for the short-to-medium term would help to provide countries like the United States a “trusted partner” outside of China to work with to support its demand for AI hardware, particularly as the market looks to expand—perhaps even double in the case of HBM—into the not-so-distant future.
Still, the expansion of production in Korea does not provide a true geographical diversification of chip production that would be needed to fully shelter the chip industry from broader risks or black swan type events. A doubling down of concentration on chip production in Korea could inadvertently work to present undue exposure to global chip supplies in the event of a potential global geopolitical conflict or other such scenarios which would cause disruptions to global shipping.
Instead, chip sector investments that Korea is making in the United States through the recent U.S.-Korea tariff MOU may indirectly provide the type of geographical diversification needed to build resilience against events which would disrupt supply chains, but this hinges on the continued close cooperation between the U.S. and Korean tech sectors as well as long-term Washington-Seoul alignment.
3. Looking ahead, how do you expect South Korea’s role within the global AI semiconductor ecosystem to evolve alongside the complementary strengths of the United States, Taiwan, Japan and Europe?
Korea’s growing importance in the field of AI is, among other things, allowing it to take a leading role in how digital governance standards will be developed and which safeguards will be put in place to protect against malicious use. One thing which the summit accomplished is the announcement of the “San Francisco AI Declaration” by Lee Jae Myung, calling for the responsible use of AI and its equitable deployment across different countries.
Where the United States has made substantial inroads toward finding common ground and consensus with other countries on AI Safety, such as through the creation of the International Network of AI Safety Institutes in 2024, as well as dialogue and discussions on the responsible use of AI at this year’s G7, Korea will likely increasingly be a part of these efforts.
As countries around the world work toward some form of unitary alignment on AI Safety and digital governance, Korea’s domestic approach toward AI governance (such as through its domestic laws on AI, through the recently implemented “AI Basic Act,” or through its early adoption of a “Digital Bill of Rights” for its citizens) may serve as something of a blueprint for other highly tech integrated countries to look toward when developing a model of their own, while (as in the case of the San Francisco AI Declaration) Korea may become a more of a global leader in itself in developing standards and consensus on AI issues.
