The decisive battleground in the artificial intelligence war is shifting. The contest has expanded beyond who builds the smarter AI model into a fight over who secures more powerful and efficient AI chips, supplies cheaper and more stable electricity, and builds data centers and industrial ecosystems faster.
The race for AI supremacy is now a vast industrial war in which foundation models, fabless design, foundries, memory, data centers and power grids are all linked as one. That is a threat to us and, at the same time, a new opportunity.
South Korea has the world's best memory chips, manufacturing base, and foundry and packaging capabilities. Add low-power, high-efficiency AI chips — neural processing units, or NPUs — and the country can create a new market without competing against global Big Tech on capital alone. That is why a "K-NPU industrialization strategy" for a leap into the top three AI powers is urgently needed.
First, Korea must move early to capture a new niche market with low-power, high-efficiency NPUs. As the AI computing market spreads beyond data centers into cars, robots, factories and smart devices, power efficiency and cost competitiveness will matter even more.
Instead of general-purpose graphics processing units that consume astronomical amounts of electricity, the country should concentrate on nurturing domestic NPUs optimized for on-device AI, inference and industry-specific services.
Combining NPUs with physical AI also matters. Domestic NPUs should be applied at manufacturing sites where Korea has world-class competitiveness — shipbuilding, semiconductors, autos and robotics — to lead an "AI transformation of manufacturing."
Second, a law fostering the NPU industry is needed to build an institutional foundation. An act tentatively titled the AI Semiconductor Development and Promotion Act should be enacted to establish a national medium- and long-term master plan, conduct regular surveys of industry conditions, and set up a dedicated support system.
Core technologies and priority products should be designated for support spanning research and development, demonstration projects, investment and financing, along with a package covering the training of specialists, international standardization and overseas market entry. Support should extend beyond fabless firms to intellectual property, design houses, foundries and packaging, software, servers and cloud services, building a "K-NPU full stack" that runs from chips to software to cloud to AI services.
Third, the government must become the "first customer." The highest hurdle for advanced industries is creating a market. Countless innovative companies founder in the "valley of death" between technology and the market.
The public sector must lay the first bridge across that valley. Demonstration projects and pilot adoption of domestic NPUs should be expanded in smart city monitoring, intelligent transport systems, public CCTV networks, disaster and safety systems, and public AI services.
Fourth, Korea must build a "regional AI industrial ecosystem" that ties NPUs together with data centers and the power grid. Continuing to concentrate data centers in the greater Seoul area has its limits. A new AI industrial map is needed, one that rationally connects where electricity is produced with where it is consumed.
Distributed AI hubs combining NPUs, data centers and energy should be created outside the capital region, where conditions for renewable energy and power infrastructure are favorable. Expansion of the national backbone power grid and distributed energy policy should be linked to data center siting policy, with swift support for transmission and substation infrastructure and grid connections.
An industry requires products and markets, and survival in global markets requires an ecosystem. Korea must seize a new market with NPUs and lay the industry's foundation in law. Public procurement must open the first market, and electricity and data centers must build the base for growth.
This is precisely the golden time for the government and the National Assembly to firmly support a great leap for Korea's semiconductor and AI industries through legislation and policy.
