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Korea to launch $687.8 million project for AI semiconductor development next month

Published: 11 Feb. 2026, 16:02 Updated: 11 Feb. 2026, 16:09

Figurines with computers and smartphones are seen in front of the words ″Artificial Intelligence″ in this file photo from Feb. 19, 2024. [REUTERS/YONHAP]

Korea will begin a 1 trillion-won ($687.8 million) project next month to develop AI semiconductors for on-device use, the Ministry of Trade, Industry and Resources said Wednesday.

The government and private companies will funnel a combined 1 trillion won into the project over the next five years, with a goal of creating some 10 AI chips that can be used in self-driving cars, smart home appliance products, humanoid robots and others, according to the Ministry of Trade, Industry and Resources.

The project is part of the government's comprehensive plan to foster the AI transformation of manufacturing industries through its Manufacturing AX (M.AX) Alliance initiative, announced at an earlier meeting between Industry Minister Kim Jung-kwan and AI chipmaking companies.

The alliance, which kicked off in September, comprises some 1,000 major companies and research institutes, including tech giant Samsung Electronics, auto giant Hyundai Motor, home appliance maker LG Electronics and robotics firm Rainbow Robotics.

The upcoming project will help local companies reduce their technological dependence on foreign AI chipmakers, the Industry Ministry said.

The government plans to improve local fabless companies' access to foundries to help them create test products for advanced nodes and strengthen financial support for the semiconductor industry by creating a dedicated investment fund for fabless companies.

Support will be extended to companies that produce middle-tech chips for the automotive, communications and defense sectors, according to the ministry.

"In the era of AI, semiconductors are a core strategic asset that determines both industrial competitiveness and national security," the industry minister said in a press release, vowing government support for the industry.

Yonhap