Presidential policy chief cites need for state infrastructure to keep AI boom rolling

Presidential policy chief Kim Yong-beom said Wednesday that the advent of a new AI era requires new state infrastructure, calling for aggressive investment to bolster the country's potential growth trajectory in the technology.

Korea's presidential chief of staff for policy made the point at a discussion hosted by the Kwanhun Club, a senior journalists' association, against the backdrop of the country's monthslong stock market boom driven by record profits and stock gains by AI-related chipmakers.

"If the ongoing semiconductor and AI supercycle constitutes the beginning of a structural transformation that will raise Korea's potential growth trajectory, as well as a reorganization of its industrial structure, our response should be different," Kim told the meeting.

He said the new AI era requires new state infrastructure to support the drive, adding that the government "needs to lay a growth foundation through pre-emptive investment that is aggressive enough to transform Korea's industrial map."

The policy chief, in particular, cited the need for massive amounts of electricity and land, as well as a new industrial ecosystem, saying that regional areas could provide a new industrial landscape featuring data centers, future electricity networks and other infrastructure.

He stated that the capital region currently has no more capacity for land, electricity or water, suggesting that the government may seek to build an additional semiconductor cluster in a regional area.

A semiconductor cluster is currently under construction in Yongin, south of Seoul, to serve as a key production hub for advanced products from major semiconductor companies such as Samsung Electronics and SK hynix.

"Discussions [on the construction of an additional cluster] are nearing the final stage," Kim said. "If they are finalized, [the government] would prepare an occasion to explain it [...] to the public."

Kim argued the new AI era also requires social discussions on how to utilize excess tax revenues, as well as policies addressing social and labor issues. "We have to look into how the fruits of growth in the AI era are shared," he said.

"AI can enrich a country, but there is no guarantee that all people could equally enjoy the benefits," added Kim.

This year, Korea's economy is expected to register a real growth rate of 3 percent from the previous year, while the nominal growth rate may reach the 10 percent range, the policy chief added.

He also cited the country's annual per capita national income reaching $40,000, record-high corporate profits and stock market rallies as positive signs for the economy.

However, Kim also voiced concerns over the continued downward trend of the Korean won against the U.S. dollar, as well as instability in the real estate market, describing them as "new tasks" to be addressed.

He described a recent bonus deal reached between the management of Samsung Electronics and its biggest labor union over corporate profits as the world's first such case, suggesting a need to institutionalize corporate-labor negotiations over bonuses.

In May, the labor union at Samsung Electronics reached a wage agreement allowing a substantial bonus package for chip employees, following months of threatening a general strike amid soaring earnings from the company's semiconductor business.

"A rule should be established through discussions," Kim said, adding that although the government is referencing France's relevant profit-sharing rules, there are not many similar cases globally regarding corporate-labor negotiations over bonuses.

Yonhap