Kim Yong-beom, chief of the Presidential Office's policy planning, warned that a memory chip supply shortage in the artificial intelligence (AI) era could help latecomers such as China grow, stressing the need for a rapid push to expand domestic fabs, or semiconductor plants. His remarks are drawing attention over whether they could serve as a rationale for response, as U.S. pressure for investment on American soil intensifies following the government's announcement of a 1,600 trillion won mega-project.
On Facebook on the 12th, Kim said, "As the AI chip super-cycle and the Lee Jae-myung administration's industrial policy move in the same direction, the long-term growth trend line has begun to change," and predicted that Korea "could become the first country to break away from a Japanese-style path of prolonged low growth." He cited the simultaneous pursuit of "production capacity expansion" and "productivity and assetization" as the backdrop for the trend change.
In a Facebook post the previous day, Kim also repeatedly stressed the importance of production capacity, saying, "Production capacity is the new national power." In particular, he cautioned against China's potential to catch up, noting that if a chip supply gap arises due to insufficient production capacity, "customers have an incentive to choose other suppliers even if their performance and quality lag behind."
He added, "If Chinese memory companies secure stable customers and production volumes in the commodity memory market, it is difficult to rule out the possibility that they could use this as a springboard to accumulate production experience and yield, enhance cost competitiveness, and expand into higher-value-added products over the medium to long term."
He went on to point out, "A supply shortage enables latecomers to enter the market, and market entry in turn becomes a springboard for technological catch-up," adding that "today's supply shortage nurtures tomorrow's competitor." Kim's argument is that, ultimately, to prevent the catch-up, the supply gap itself must be blocked from the outset.
Kim said, "Fab expansion is both an offense for growth and a defense to protect the technology gap," assessing that "a semiconductor plant is more than a production facility. It is an industrial ecosystem where advanced materials and equipment companies, research and development personnel, and infrastructure are concentrated, and a hub where national industrial capabilities accumulate."
Regarding the government's role, he added, "The first thing the state must supply is time," saying that "scale and speed are not a choice but a condition for survival."
