The Ministry of Trade, Industry and Energy announced on June 2 that the "K-On-Device AI Semiconductor Technology Development" initiative has been finalized with a total project budget of 800.23 billion won. The government will contribute 511.11 billion won, with the project set to run until 2030.
This initiative aims to support the full-cycle development of advanced AI products across four key industries: automotive, Internet of Things (IoT) and home appliances, machinery and robotics, and defense. It will focus on developing customized AI semiconductors, modules that incorporate these semiconductors, and the AI software that drives them.
On-device AI semiconductors perform calculations and inferences in real-time with low power consumption, without the need for data transmission to servers. The global market for these semiconductors, which was valued at $17.3 billion in 2024, is projected to grow to $103.3 billion by 2030. Unlike server-oriented AI semiconductors like GPUs, there is currently no dominant player in the on-device market, making compatibility with products from demand companies crucial.
The government views this sector as a strategic opportunity for South Korea, which has promising fabless companies and major global demand firms in key industries. Currently, the AI semiconductor market is dominated by NVIDIA's data center GPUs, but the focus is expected to shift toward the "Edge AI" market, which includes smartphones, automobiles, robotics, and home appliances.
As AI becomes increasingly integrated into everyday devices, the demand for on-device AI is expected to surge. Notably, South Korea is home to global manufacturers such as Samsung Electronics, LG Electronics, Hyundai Motor Company, HD Hyundai, and Hanwha Aerospace, as well as growing fabless AI semiconductor companies like Rebellion, DeepX, and FuriosaAI.
To develop the full cycle of AI semiconductors, the Ministry will focus on AI chips and software for next-generation autonomous vehicle control systems in the automotive sector. In the IoT and home appliance sector, the initiative will create on-device AI chips and software for smart appliances and intelligent spaces.
In the machinery and robotics sector, the project will develop AI chips and software for next-generation collaborative robots used in manufacturing and food services, humanoid robots to assist with household tasks, and AI chips for robots that autonomously perform agricultural tasks such as pest control, harvesting, and transportation. In the defense sector, the focus will be on developing AI chips and software for aerial unmanned platforms that can autonomously recognize and respond to situations.
The Ministry plans to announce the project this month and begin implementation in July to capitalize on the golden opportunity to lead the on-device AI market. Minister of Trade, Industry and Energy Kim Jeong-kwan stated, "On-device AI semiconductors are a key strategic asset that will determine supremacy in the AI era. We will spare no effort in providing comprehensive support, including R&D, validation, mass production, financial assistance, and regulatory improvements, to ensure that the developed chips are actually integrated into finished products in key industries like automotive."
* This article has been translated by AI.
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