JIL's Take on AI: Korea's AI Leap
Korea is allocating $7B to AI R&D. Samsung and SK Hynix dominate the HBM memory chip market critical to AI training. NAVER is investing heavily in large language models. Korea is positioning as the AI semiconductor hub of Asia.
Korea is allocating $7 billion to AI R&D as Samsung and SK Hynix dominate the high-bandwidth memory (HBM) chip market — the critical bottleneck in AI training infrastructure.
KT Corp, LG AI Research, and NAVER are each investing in large language model development, creating a domestic AI stack that sits atop Korea's world-leading hardware base.
The investment thesis is differentiated from the China AI story: Korea's exposure is primarily through semiconductor supply chain, where its companies hold near-monopoly positions in HBM. The geopolitical risk profile is also different — Korea is a US ally, and its semiconductor exports face far less restriction than Chinese equivalents.
For investors seeking AI infrastructure exposure with a more favourable geopolitical risk profile than China, the Korean semiconductor names represent a compelling allocation. SK Hynix in particular has pricing power that most semiconductor companies do not — HBM demand exceeds supply and will do so through at least 2027 on current trajectory.
