[News] South Korea’s New President Lee Jae-myung Promotes AI Chip Drive, But Industry Doubts Remain

With Lee Jae-myung of the Democratic Party of South Korea virtually confirmed as the 21st president, attention is turning to whether he will deliver on pledges to strengthen South Korea’s semiconductor industry—its top export and a key growth driver in the AI era, as noted by Chosun Biz. President Lee pledged 100 trillion won in investments and the procurement of 50,000 GPUs during his campaign—signaling a strong commitment to fostering domestic AI semiconductors, according to Chosun Biz.

President Lee’s AI and Semiconductor Policy Agenda

Among President Lee’s key pledges is strengthening the presidentially-led National AI Committee and appointing an AI policy chief within the presidential office. The administration also plans to designate AI data centers as next-generation social overhead capital (SOC) and purchase domestic chips in bulk—moves aimed at fostering a “K-NVIDIA,” as Lee has repeatedly emphasized, according to Chosun Biz.

The initiative will be financed through a 100 trillion won national fund, with a significant portion expected to be directed toward building a “K-cloud” powered by domestically developed AI semiconductors, as the report notes.

Meanwhile, President Lee has also proposed a “semiconductor special law” that would offer a production tax credit of up to 10% for semiconductors produced and sold domestically, according to Yonhap News.

Work Hour Limits and Subsidy Gaps in Chip Strategy

However, Chosun Biz highlights that the industry views these pledges as insufficient. Sources cited in the report note that without flexible measures—such as exemptions for R&D personnel from the 52-hour workweek law—the effectiveness of the proposed investments may be significantly reduced. Lee pledged to enact a semiconductor special law during his campaign, but he did not clarify whether it would include an exemption from the 52-hour workweek rule, as noted by Yonhap News.

In addition, while President Lee has pledged a production tax credit of up to 10% for domestically produced semiconductors and broader tax benefits, Chosun Biz, citing sources, notes this falls well short of the direct financial support offered by countries like the U.S. and Japan. Sources cited in the report also state that building a fab in South Korea can cost up to 50% more than in Japan, and if these high costs and labor constraints continue, it will become increasingly difficult to attract investment.

Read more

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(Photo credit: Lee Jae-myung’s X)