South Korea rounds up chipmakers and hyperscalers to build AI and server processors

Data center companies and chipmakers have signed an agreement as the government seeks to deglobalize their supply chain

As semiconductor demand and supply chain insecurity both continue to grow, South Korea has decided it wants its own CPU production capability and has pushed its chip companies and hyperscale operators together to make it happen.

According to South Korea’s Ministry of Science and ICT on Tuesday, five data center companies have signed a memorandum of understanding with five chip companies and the Artificial Intelligence Industry Cluster Agency to expand the use of homegrown tech, particularly AI chips, in their data centers.

The chip companies, SK Telecom, Rebellions, FuriosaAI, and the Electronics and Telecommunications Research Institute, have also agreed to establish a testing facility for the tech in Gwangju, a city in the southwest corner of South Korea.

The participating Korean companies are Naver Cloud, ICT company Douzone Bizon, local AI-player Kakao Enterprise, big web gaming and entertainment company NHN and telecom company KT. Naver is a Google analog and like the other participating companies operates at very considerable scale. If all adopt home-grown silicon, South Korean manufacturers will have a very decent market.

The silicon development scheme is the latest South Korean attempt to stimulate local industry. A few weeks ago, the government announced a 510 trillion won (US$451bn) support package to increase in-country chip production, benefitting small companies as well as the likes of Samsung and SK Hynix.

Last week the nation announced it wants to build an exascale computer with mostly home-grown parts to run local CPUs by 2030.

The moves come as Japan and China focus on supercomputers and China makes its own attempt at achieving silicon self sufficiency. ®