South Korea’s AI advancement: memory chips, AI-proficient youth, and a smartphone in every hand

South Korea is becoming a global AI force to be reckoned with. Known as one of the Four Asian Tigers, along with Hong Kong, Taiwan, and Singapore, the nation of 52 million has been busy this year. From REAIM 2023 dedicated to military AI to AI & Big Data Show showcasing the latest ML-backed smart gadgets – South Korea has a lot going for it.

All this comes as no surprise; after all, based on the latest Global AI Index by Tortoise Media, the country is now sixth overall and third after the US and China in AI development. Let’s explore why this is and how a nation four times smaller than Germany is confidently hitting it out of the park.

It’s all coming from upstairs

We’ve all heard the expression “a fish rots from the head down,” referring to how unscrupulous and incompetent leadership can mess things up on a large scale. Quite logically, the reverse is also accurate, especially for diligence-oriented places like South Korea, where solid government policies lead to equally solid results.

It takes but a quick read through this official prospectus published by the government of South Korea in 2019 to see how seriously the Korean political establishment is taking emerging AI technologies. The country’s National Strategy for AI is a neatly laid out, centralized nation-wide vision approved and signed into action by South Korea’s then-President Moon Jae-in.

Having outlined three of South Korea’s advantages on the global stage – education completion rate, memory semiconductor production, and smartphone penetration rate – the government formulated a plan to capitalize on these strengths in the years to come.

Image source: National Strategy for Artificial Intelligence

Korea’s budding talent

The first among South Korea’s strengths is its highly educated young people. According to the Paris-based OECD, South Korea is 20% ahead of the US and almost 10% ahead of its chief rival, Japan, when it comes to how many young people graduate with university degrees. This is a very promising statistic in and of itself, but Seoul has been reinforcing this trend by steering much of the country’s educational focus toward computer science.

As a result, South Korea now has many up-and-coming specialists already proficient in AI, as well as those who are in the process of obtaining and solidifying their AI expertise. While numerous respected universities in South Korea offer AI courses and degrees within their Engineering and CS departments, many leading universities – among them, Korea Advanced Institute of Science and Technology (KAIST), Seoul National University, Korea University, and Yonsei University – actually have whole AI departments, graduate schools of AI, or even entire AI institutes within their academic structures. Expectedly, the establishment of these AI research bodies coincided with the publication of the country’s National Strategy for AI.

Memory semiconductors

Another factor is that South Korea has a huge advantage over most other countries competing for AI dominance, because it’s a global leader in the production of memory semiconductors. Also known as “DRAM chips” or simply “memory chips,” these can be seen inside every smartphone. Crucially, no AI advancement is possible without them since they provide the necessary hardware for data processing and storage.

Two of the largest memory chipmakers on the planet are South Korean companies, SK Hynix and Samsung Electronics, with the latter, partially subsidized by the government of South Korea, planning to invest almost $230 billion into building the world’s largest semiconductor facility by 2042.

According to Georgetown University’s CSET, semiconductors were South Korea’s most important export item in 2022, making up close to 20% of the country’s total export volume. Importantly, nearly 60% of that, worth close to $70 billion, went to support China’s production of electronic equipment. Furthermore, the intense economic rivalry between China and the US is now benefitting South Korea more than ever. As the US is actively working to curtail China’s chip production expansion, this is inadvertently creating advantageous conditions for South Korean companies.

As a result, South Korea’s semiconductor production market share has recently climbed to a whopping 70% from the already impressive 58% in 2018, allowing Seoul to gain further ground on Washington and Beijing in the global AI race.

Generative AI

Where one goes, the other will follow. With the production of AI-enabling hardware in South Korea’s pocket, the country has been busy preparing ML algorithms and utilizing training data to produce generative AI – a type of technology that allows computers to create original content by learning from existing examples. Arguably, the most famous generative AI product today is ChatGPT from OpenAI that produces human-like textual responses.

LLMs (Large Language Models) that are at the core of ChatGPT and other linguistic AI solutions like Google’s Bard increasingly demand more powerful memory chips to store chat history and user preferences, essential for generating appropriate answers. Predictably, South Korea leveraged its strength in memory chip production, responding to OpenAI by unveiling its own generative AI solution two months ago – Naver’s HyperCLOVA X.

And that’s not all. The country is also making great strides when it comes to deep fakes, which are a subset of visual generative AI. Earlier this month, another South Korean company, Pulse9, put out an AI-based virtual avatar creator, with some of the more famous avatars having attained pop idol status in the country.

Everyone has a smartphone

The aforementioned example of South Korea’s AI efforts is not just the result of Seoul’s dominance in memory chip production. Notably, it’s also tied to another crucial factor within its National Strategy for AI –  the country’s smartphone penetration rate.

This rate refers to the percentage of the population that owns a smartphone in comparison to the total population. South Korea’s current smartphone penetration rate of 96% means that 96 out of every 100 people in South Korea own a modern smartphone (compared to 82 people in the US and fewer than 70 in Japan). This telling figure indicates widespread usage of mobile technology among the country’s residents, reflecting South Korea’s status as one of the most technologically advanced and connected countries in the world, with some of the fastest mobile internet.

What this means is that while the population of South Korea is tech-savvy and willing to integrate AI into their daily lives, importantly, the hardware necessary to run AI applications is also instantly available to most members of the public.

Total makeover

So, with a high percentage of AI-proficient young people, high-performance memory chips, and a smartphone in every hand, the government of South Korea has been using these assets to enhance the country’s AI infrastructure.

One of the ways Seoul has been doing it is through the amalgamation of private and public data. Since any AI solution relies on abundant data sources, the government is now securing these sources by having all of the country’s administrative work, industry-specific documentation, and national laws gathered into one data platform. Private companies are also being asked to help out by sharing non-confidential, anonymized user data. The idea is to strengthen linkage between public and private “data maps,” allowing more integrated data searches and more effective data analysis.

This marriage of public and private entities continues with the government’s “regulatory innovation,” which translates into a more welcoming AI startup environment. The plan here is to incentivize domestic and international entrepreneurs to register their companies in South Korea. The government has begun to succeed in this by offering friendlier taxation rates, simplifying paperwork requirements, and providing state funding for promising projects spearheaded by newcomers.

The expectation is that by 2030 these measures will have placed South Korea in the world’s top 5 for regulatory AI innovation and top 10 for nurturing global AI startups.

Techno-symbiosis

In this ambitious transformation, the private sector holds another important role. Beyond the government’s trailblazing efforts with AI-centric policies, major South Korean corporations are propelling AI forward by channeling significant investments into smaller companies.

One example is Hyundai – a famous automaker operating the world’s largest manufacturing plant in the south-east of the country. Just this year, the company revealed that as part of its global collaboration strategy it had invested $1 billion USD in over 200 startups between 2017 and 2023. In addition, Hyundai also has major stakes in Boston Dynamics (AI/robotics), Motional (AI/self-driving vehicles), and Supernal (AI/aerial drones).

Meanwhile, another South Korean technology giant, LG, has been harnessing the power of AI to sift through manuals and patents in order to extract information and select the best designs. Established in 2020, the company’s AI Research division, known as Advanced Machine Learning Lab (AML Lab), has made notable advancements. Among its achievements to date is a large-scale multimodal AI named EXAONE 2.0, which the company has been using to process 45 million professional documents, encompassing 350 million pieces of image-text data.

Conclusion

When we review South Korea’s impressive progress in AI, it is evident that the public sector’s role in facilitating AI development is huge. However, equally important is the private sector’s willing collaboration. The government’s long-term AI strategy streamlines business processes, eases legal barriers, and offers financial incentives. In response, companies in South Korea, both established and new, are contributing exactly what the government needs – cooperation and initiative.

In this respect, South Korea stands as a great illustration of the timeless principle: “you scratch my back, and I’ll scratch yours.” Crucially, this synergy is fuelled not just by economic incentives but also by a unified vision for a prosperous, AI-integrated future that will benefit everyone in the nation. What’s more, this blend of economic strategy and national ideology is embraced by the country’s high-tech population, who are ready and eager to play their part in the AI revolution, knowing that they’ll one day be able to enjoy the comfort and affluence it brings.