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South Korea
Intelligence for Better Decision Making
AI-Driven Growth to Propel SK Hynix in Semiconductor Market Amid Challenges
Feb. 21, 2025 | Indirect IndicatorIn a recent address at a conference in Seoul, SK Hynix President Kwak No-jung highlighted the potential of low-cost AI models, particularly China's 'DeepSeek,' to unlock significant long-term opportunities in the semiconductor market.
Despite current challenges, he expressed optimism for both the AI and memory sectors, emphasizing the need for collaboration to weather the industry's downturn. While concerns were raised about potential reductions in AI server investments by major IT companies, which could affect sectors like High Bandwidth Memory (HBM), Kwak maintained confidence that advancements in AI would eventually drive greater demand for semiconductors.
Kwak projected an improvement in the NAND market by the end of the year, attributing this to industry stabilization efforts. He underscored the crucial role of AI innovations in fueling future growth within the semiconductor sector and pledged his support for the industry beyond his tenure.
Although he acknowledged that DeepSeek's generative AI model might cause short-term fluctuations, he anticipated substantial long-term benefits, with AI progression amplifying semiconductor demand. He further anticipated a recovery in the currently weakened NAND flash market by year-end, reiterating the sector's ability to stabilize through collective efforts.
Addressing fears that DeepSeek's cost-effective AI might diminish HBM demand, Kwak suggested that AI's impact would ultimately serve to enhance semiconductor growth over time.
When asked about the proposed 25% semiconductor tariff by US President Donald Trump, Kwak remarked that it was too early to discuss specifics, as details remain unspecified. Upon stepping down from the Semiconductor Industry Association, he noted significant industry developments, such as the downturn and the surge of AI technologies.
Despite leaving his role, Kwak reaffirmed his commitment to the semiconductor industry, highlighting the succession of Song Jae-hyuk, president of Samsung Electronics Device Solutions, as his successor.
South Korea's Ambitious AI Data Center Development and Industry Innovations
Feb. 21, 2025 | Indirect IndicatorSouth Korea is embarking on a groundbreaking venture to construct the world's largest artificial intelligence data center.
Leading this monumental initiative is Brian Koo of the LG Group family, supported by the investment group Stock Farm Road, co-founded by Koo and Amin Badr-El-Din. With an impressive investment reaching up to $35 billion, the facility will boast a capacity of three gigawatts.
Scheduled for completion in 2028, the data center will be located in South Jeolla Province, although precise site specifics have not been disclosed. While key resources such as power and water have already been secured, the project may encounter challenges related to global supply chain disruptions, notably the shortage of AI chips from Nvidia.
Brian Koo is actively advancing this ambitious AI venture with an initial investment of $10 billion from Stock Farm Road. The funding is expected to expand as needed, in response to the growing demand for AI, which is sparking numerous data center projects across Asia.
Experts suggest South Korea should concentrate on enhancing AI infrastructure and technologies to compete with international rivals such as China's DeepSeek. Samsung's Song Jai-hyuk emphasizes the need for industry collaboration to address the increasing demands of AI technology, particularly in semiconductor development, while navigating challenges in design and production timelines.
To strengthen its AI capabilities, South Korea plans to acquire 18,000 high-performance GPUs by mid-2026. These GPUs will form a cornerstone of the new national AI computing center, opening in 2027, as part of Korea's aspiration to rank among the top three global AI powers.
The Korea Development Bank is poised to support this initiative with low-interest loans, aiming to leverage AI's potential in processing-intensive tasks. Simultaneously, the Ministry of SMEs and Startups is launching a 3 trillion won AI fund aimed at promoting AI adoption among small and medium enterprises (SMEs) and nurturing emerging AI startups.
By fostering AI model development and data synthesis initiatives, South Korea targets a 50% AI usage rate among SMEs by 2027.
In the telecommunications sector, South Korea faces potential regulatory fines of up to 5.5 trillion won from the Fair Trade Commission due to alleged collusion in sales incentives. This situation could affect investment capabilities in AI and related telecommunications sectors by imposing financial constraints.
Companies involved are contesting the fines, emphasizing adherence to guidelines while awaiting the commission's final decisions. Nevertheless, investments in AI resources are on the rise, particularly in healthcare and telecommunications, which are rapidly integrating technologies like predictive analytics and network optimization.
Further advancing its AI prowess, South Korea is witnessing significant progress with Naver's Hyperclova X, a model that brings notable improvements in business-to-business applications through enhanced performance and efficiency.
Naver is committed to keeping Hyperclova X competitive in the ever-evolving AI landscape by continuously adapting to sector demands.
In the broader Asian market, South Korea is paving the way for AI growth. The region is poised for substantial expansion in commercial and consumer PCs, bolstered by the media and content industries.
As highlighted by HP's Samir Shah, Korea's rapid technology adoption and dynamic digital marketplace are pivotal for pushing AI advancements across the Asia Pacific.
AI-driven remote collaboration solutions are transforming South Korea's SMEs by optimizing processes with innovations like smart glasses and vision AI. Companies such as Deepfine and Burnect are at the forefront of these advancements, offering augmented reality-based tools that enhance training, safety, and productivity in industries like manufacturing, logistics, and construction.
Monitored Intelligence for South Korea - Feb. 21, 2025
News
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387
Government
Releases
22
City/State
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36
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Releases
1
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0
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0
Academic/
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7
Think
Tank
7
Podcasts
0
Videos
0
Social
Media
0
Business
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3
Erudite Risk takes an all risks approach to intelligence reporting. We categorize key intelligence into one of 40 different risk intelligence categories.
The goal is to provide intelligence that allows decision makers to avoid being blindsided by what they may have missed, while informing them to make better decisions as well.
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21
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5
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Erudite Risk also includes operations categories so you can monitor the environment for better decision making. Everything is tied together--what happens in risk affects operations and what happens in the market impacts risk profiles.
We categorize key intelligence into one of 30 different operations intelligence categories.
Different roles and functions within the organization can monitor different key issue areas. HR may monitor employment, wages, regulations, labor and management relations, etc., while P&L leaders may monitor overall developing trends.
Operations Categories Reported on Today
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16
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5
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11
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1
Environment for S. Korean exports unfavorable amid global expansion of protectionism: ministry
Yonhap | English | News | Feb. 21, 2025 | Regulation
South Korea's export environment has sharply deteriorated in February 2025 due to declining prices of semiconductors and petroleum products, compounded by rising global protectionism. The Industry Ministry reported that sluggish global demand and significant price drops in key exports are driving this trend. Major economies are rapidly reacting to the new U.S. administration's trade policies by imposing tariffs.
In January, South Korea recorded its first export decline in 15 months, with a year-on-year drop of 10.3 percent to $49.1 billion. This decline can be linked to fewer business days from the Lunar New Year holiday, with petroleum products facing a substantial decrease of 29.8 percent among major sectors.
In light of these issues, the Industry Ministry is deploying support measures to alleviate uncertainties for local businesses. These include a robust 366 trillion won ($253.9 billion) trade financing scheme for export firms impacted by global trade volatility tied to U.S. tariffs. The ministry is also engaging with industry officials to evaluate the potential effects of proposed U.S. tariffs on imports and formulate responsive strategies.
北, 호주의 美핵잠 도입 추진 비난…"관성적 반응 내놓으며 탐색전"
North Korea criticizes Australia's push to introduce US nuclear submarines... "Exploratory warfare with inertial response"
Joongang Ilbo | Local Language | News | Feb. 21, 2025 | North Korea
North Korea strongly opposes Australia's role in introducing US nuclear submarines through the AUKUS alliance, viewing it as a significant regional threat. The North Korean government warns that the deployment of these submarines could escalate tensions and destabilize the Asia-Pacific area.
Officials denounce Australia's actions as "exploratory warfare," predicting that the introduction of nuclear-powered vessels will trigger negative reactions from neighboring countries and potentially spark an arms race.
North Korea also reaffirmed its commitment to strengthening its defensive measures and indicated that it would respond to perceived threats accordingly. This statement underscores the ongoing geopolitical tensions and the complex military dynamics among regional powers.
U.S. can respond in 'overwhelming' way in case of N.K. ICBM attack: official
Yonhap | English | News | Feb. 21, 2025 | North Korea
A senior U.S. military official has stated that the United States is ready to respond "overwhelmingly" to any North Korean intercontinental ballistic missile (ICBM) attack. Maj. Gen. Jason Armagost emphasized the effectiveness of the U.S. nuclear deterrence strategy, asserting that an ICBM launch by North Korea would be futile due to the U.S. capability for a decisive response.
At a forum hosted by The Korea Society in New York, Armagost highlighted the significance of the U.S. nuclear triad—ICBMs, strategic bombers, and submarine-launched ballistic missiles (SLBM)—for national security. He noted that this robust triad offers a flexible range of deterrence options, with SLBMs enabling a second strike capability even after a first adversarial attack.
Concerns have risen about North Korea's ICBM development and the potential impact on U.S. commitments to defend South Korea. Despite fears that the U.S. might hesitate to intervene to avoid escalation, Armagost's assurances reinforce the strong deterrent posture that the U.S. maintains against North Korean threats.
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