The experiences from four industrial revolutions have left a clear lesson: countries that successfully connected science and technology with industry and markets have led the next era. The first industrial revolution in late 18th-century Europe was not merely a victory of the steam engine; it was a transformative shift that opened the modern age, driven by new power sources, open markets, and supportive institutions and entrepreneurship. Adam Smith's "The Wealth of Nations," published in 1776, provided the economic rationale for this revolution. Two years later, Park Je-ga's "Northeast Asia" was published, hinting at the potential for industrial promotion under the new trade system implemented during King Jeongjo's reign. However, the failure to connect technological innovation, markets, and institutions led to the loss of modernization opportunities in Joseon history.
This historical lesson remains relevant today in the southwest region of South Korea. The government recently announced a historic investment plan to rewrite the nation's semiconductor history in this area during the "Korea's Great Leap: Three Mega Projects National Report Meeting." While there are diverse criticisms surrounding this initiative, it is clear that AI and semiconductors are at the center of technological supremacy, with national security expanding into the realms of economy, industry, and science and technology. We are at a pivotal moment in what is termed the politics of technology. The strategic choices made during critical moments, such as the emergence of smartphones in 2007, AlphaGo in 2016, and ChatGPT in 2022, underscore the importance of these decisions. If the region does not act now, opportunities will slip away again, as South Korea must chart its course in the global economy and digital industry in the AI era.
From an economic and industrial perspective, five key factors for successfully leading new industrial clusters include AI infrastructure, energy including power networks, talent, the presence of anchor companies, and the expansion of venture capital. The recent announcement of semiconductor investments and production base construction by Samsung and SK Hynix in the Honam region fulfills the criteria for anchor companies, instilling hope for the future. Given the promise of large-scale job creation, success is already more than halfway assured.
Contrary to critical debates, the southwest region possesses ample potential and possibilities. Gwangju has established an AI infrastructure with the National AI Data Center, AI cluster, and AX demonstration base. Jeonnam boasts nuclear power alongside renewable energy and ample growth space. If combined with the research capabilities and talent development functions of the Gwangju Institute of Science and Technology (GIST), the southwest could emerge as a hub for designing, validating, and demonstrating AI semiconductors.
Above all, the key is to connect the semiconductor industry's value chain within the southwest region. When design talent, advanced packaging, validation infrastructure, companies, and energy are linked, a self-sustaining ecosystem can be established. In this regard, GIST serves as a crucial starting point for nurturing the semiconductor industry in the southwest. Already operating a semiconductor contract program with Samsung Electronics, GIST has begun formalizing its educational system through collaborations with leading global semiconductor IP firm Arm to train specialized AI semiconductor design talent and with global testing and measurement company NI (National Instruments) to establish the GIST-NI School.
Recently, major domestic companies, including Samsung Electronics and SK Hynix, have unveiled investment plans for the southwest region, including the establishment of semiconductor production bases. This marks a significant turning point in the development of a semiconductor cluster in the southwest. It reflects that the government's policies are not merely artificial resource allocations for specific regions but are strategic decisions made by companies considering power, land, talent, and validation infrastructure comprehensively.
Now, the government is reviewing bold support policies in terms of incentives. Beyond the incentives provided for economic free zones or research and development special zones, a "Triple 5" strategy is proposed to further increase the real income of local workers and reduce the investment burden on companies. For instance, this strategy would involve raising local workers' salaries by 5% compared to similar industries in the metropolitan area while lowering income and corporate tax burdens by 5% each, creating incentives for people and companies to move together to the southwest cluster.
The lessons of history are clear: windows of opportunity only open in prepared regions. The philosophy of integrating Jeonnam and Gwangju must extend beyond administrative unification to encompass new industrial governance. When Gwangju's AI, Jeonnam's energy, and the semiconductor education and research capabilities of local universities, including GIST, are connected, the southwest will not be a periphery but will write a new chapter as a new forward base for South Korea's AI semiconductor industry.
* This article has been translated by AI.
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