One of the most pressing questions in South Korea's modern economic history has always been the same: What will we rely on for our livelihood? In the 1960s, the answer was steel and shipbuilding; in the 1980s and 1990s, it was automobiles and electronics. Since the 2000s, semiconductors and the information and communication industry have become the backbone of the South Korean economy. However, history has never allowed a specific industry to dominate forever. Just as there was an era of steel and an era of automobiles, semiconductors have now reached a point where they must redefine their role in a new civilizational shift, and that shift is called artificial intelligence (AI).
Today, the world stands before a massive wave of the AI revolution. However, many people understand this revolution too simplistically. With the emergence of ChatGPT and DeepSeek, and the announcement of new large language models, the world seems to celebrate as if these developments represent the entirety of the AI revolution. Daily debates arise over which model is smarter, which country is ahead, and who will first achieve human-level intelligence. Yet, the history of industry teaches us the same lesson: the unseen foundations are more important than visible results. In the age of steam engines, the key was not the train but coal; in the automotive era, it was not the car manufacturers but the oil supply chain; and in the internet age, it was not the portals but semiconductors and communication networks.
The AI era is no exception. The essence of the AI competition currently unfolding globally is not a chatbot race but a competition for computational power, and at the heart of this competition lies the semiconductor race. AI ultimately consumes electricity and operates through machines, requiring processors to perform calculations, and memory to enable those processors to reach their full potential. As AI models grow larger, the importance of memory increases exponentially.
In today's AI data centers, the most critical asset is the GPU, and the performance of the GPU is determined by HBM (High Bandwidth Memory). If the GPU is the brain, then HBM is the bloodstream. No matter how brilliant the brain, it cannot function if the bloodstream is blocked; similarly, no matter how powerful the AI, it cannot exist without memory.
This is where South Korea's strategic value emerges. While the world focuses on the competition between the United States and China, the key components enabling that competition are supplied by South Korea. The U.S. is constructing astronomical-scale data centers to maintain its AI dominance, while China is building more AI servers to overcome U.S. sanctions. Memory is essential for the U.S. to attack and for China to defend. Whether the U.S. wins or China catches up, memory will be sold. Just as oil consumption increased during the Cold War as the U.S. and the Soviet Union competed, memory consumption will rise as the U.S. and China compete in the AI era. And the country with the oil refinery is South Korea.
Recent AI-related indicators have made this structure even clearer. The U.S. still possesses world-class AI research and development capabilities, capital markets, and platform ecosystems, while China is rapidly closing the gap. In terms of papers, patents, industrial robot proliferation, and manufacturing applications, China has already entered the global top tier. However, advanced semiconductor design, core software ecosystems, global investment capital, and innovation systems still operate primarily around the U.S. This is why the U.S. is seen as the champion of innovation, while China is viewed as the champion of efficiency.
The emergence of DeepSeek symbolically illustrates this reality. Some have referred to it as the AI Sputnik shock, but a more measured perspective is necessary. China is aggressively pursuing advancements but has not yet completely surpassed the U.S. However, what truly matters is not the current victory or defeat but the speed of the pursuit. History has always been shaped by the speed of latecomers. Japan's manufacturing sector exemplified this, as did South Korea's semiconductors, and now China's AI is following this historical trend.
From an industrial perspective, another crucial fact emerges. The U.S. needs more GPUs and data centers to defeat China, while China requires more AI servers and computing resources to catch up. HBM is necessary for both the U.S. victory and China's pursuit. Memory will be sold whether the U.S. invests or China chases. This is the structural benefit of the AI era.
Many investors focus solely on NVIDIA in the AI industry. However, a broader question arises when considering the entire industry: What will be consumed the most as the AI war prolongs? The answer is memory. If data is the new oil of the AI era, then memory is the bloodstream that moves that data. And the country that excels in producing that bloodstream is South Korea.
However, we must not stop here. Semiconductors are just the beginning. The real change is only starting now. Until now, AI has primarily existed on screens. People have interacted with AI, created documents, and generated images. But in the future, AI will emerge into the real world. It will operate factories, control robots, drive cars, manage ships, and oversee logistics. The moment AI integrates with real-world machines, humanity will enter another industrial revolution, and that revolution will be called physical AI.
Many experts predict that over the next decade, the focus of the AI industry will shift from generative AI to physical AI. If this forecast becomes reality, South Korea will find itself in a more advantageous position than expected. This is because South Korea is not only strong in semiconductors but also a manufacturing powerhouse. It has automobiles, shipbuilding, batteries, displays, precision machinery, and steel industries. While the U.S. excels in software, its manufacturing base is relatively weak, and while China has a massive manufacturing scale, it faces limitations in advanced semiconductors and global trust systems. In contrast, South Korea is one of the few countries that possesses both manufacturing and digital technology. In an era where AI operates factories, designs ships, and produces cars, the value of being a manufacturing powerhouse will inevitably rise.
From this perspective, Jeonbuk and Saemangeum take on entirely different meanings. Many have understood Saemangeum as merely a land reclamation or regional development project. However, from the perspective of the AI era, Saemangeum represents a vast strategic space. AI data centers require enormous amounts of power, humanoid robots must be trained in real environments, and autonomous driving systems need extensive testing grounds. The metropolitan area is nearing saturation, with power shortages and excessively high land costs. In contrast, Saemangeum offers vast space, ports, renewable energy potential, and the capacity for industrial complex development.
If AI data centers, next-generation semiconductor industrial complexes, humanoid robot clusters, autonomous logistics centers, smart agricultural innovation zones, and physical AI testing grounds are interconnected as a single ecosystem, Saemangeum could become not just a regional development project but a national strategic hub that redraws South Korea's industrial map. Just as Ulsan symbolized South Korea's economic growth during the industrialization era and Pangyo became a symbol of the digital revolution, the AI era requires another strategic space. This is why I propose the concept of Jeonbuk as the special capital of physical AI.
However, we must remember one crucial fact: what drives history is not technology itself but the national strategy that connects technology to a vision. In the 19th century, Britain did not dominate the world simply because it invented the steam engine first. It established a national system that connected the steam engine to railroads, shipbuilding, finance, trade, education, and industry, allowing it to stand at the center of the world. Similarly, in the 20th century, the U.S. became a superpower not just because it created automobiles and electricity first, but because it developed them into a cohesive economic system and way of life.
The AI era will be no different. South Korea's future is not guaranteed merely by producing the world's best memory semiconductors. We must connect semiconductors to AI, AI to manufacturing, manufacturing to physical AI, and physical AI to national innovation strategies. Only when industries connect and technologies converge can a new civilization be born.
South Korea's strengths are clear. It has the world's best memory semiconductors, a globally competitive automotive industry, and robust shipbuilding, steel, battery, display, and precision machinery sectors. All these industries are national assets created through decades of accumulated technology, talent, and industrial ecosystems. At this juncture, South Korea occupies a unique position that neither the U.S. nor China can replicate. The U.S. has the world's best software and platform competitiveness but a relatively weak manufacturing base. China has the largest manufacturing scale but still faces limitations in advanced semiconductors and global trust systems. In contrast, South Korea is one of the few countries that possesses both semiconductors and manufacturing capabilities.
Ultimately, South Korea must create a new national model that is neither the U.S. model nor the Chinese model. If the U.S. is the champion of innovation and China the champion of efficiency, what should South Korea become? I believe it should become the champion of trust.
In the future, AI will not just be a technology; it will become a core infrastructure that drives national governance, industry, finance, healthcare, education, and administration. In such an era, people will not simply want fast or massive AI; they will seek trustworthy AI. South Korea, based on democracy and the rule of law, possesses world-class manufacturing and semiconductor industries. It should supply memory that the U.S. cannot easily produce, offer trust that China struggles to provide, and combine AI with world-class manufacturing. This is the path South Korea must take.
Over the past century, South Korea has achieved three miracles: the miracle of industrialization, the miracle of democratization, and the miracle of informatization. Now, we stand at the threshold of a fourth miracle: the miracle of AI semiconductors, the miracle of physical AI, and beyond that, the miracle of South Korea's second founding.
In the biblical story, David was not stronger than Goliath. However, David knew where to throw his stone. South Korea must take a similar approach. There is no need to follow the U.S. path blindly or imitate China. South Korea must forge its own path.
With the world's best memory semiconductors, world-class manufacturing, trust built on democracy, and the resilience of its people to turn crises into opportunities, these four elements will become South Korea's strongest strategic assets. In an era where the two Goliaths, the U.S. and China, clash over AI supremacy, South Korea does not need to be the largest nation; it only needs to be the most necessary one. At the center of that path lies AI semiconductors, and at the end, there is a vision of physical AI, trust as a nation, and the second founding of South Korea.
This is not merely an industrial strategy. It is a new national strategy that opens the next 100 years for South Korea and a civilizational choice to pass on to future generations. South Korea's fourth challenge, moving beyond industrialization, democratization, and informatization toward the era of AI and physical AI, has just begun.
Today, the world stands before a massive wave of the AI revolution. However, many people understand this revolution too simplistically. With the emergence of ChatGPT and DeepSeek, and the announcement of new large language models, the world seems to celebrate as if these developments represent the entirety of the AI revolution. Daily debates arise over which model is smarter, which country is ahead, and who will first achieve human-level intelligence. Yet, the history of industry teaches us the same lesson: the unseen foundations are more important than visible results. In the age of steam engines, the key was not the train but coal; in the automotive era, it was not the car manufacturers but the oil supply chain; and in the internet age, it was not the portals but semiconductors and communication networks.
The AI era is no exception. The essence of the AI competition currently unfolding globally is not a chatbot race but a competition for computational power, and at the heart of this competition lies the semiconductor race. AI ultimately consumes electricity and operates through machines, requiring processors to perform calculations, and memory to enable those processors to reach their full potential. As AI models grow larger, the importance of memory increases exponentially.
In today's AI data centers, the most critical asset is the GPU, and the performance of the GPU is determined by HBM (High Bandwidth Memory). If the GPU is the brain, then HBM is the bloodstream. No matter how brilliant the brain, it cannot function if the bloodstream is blocked; similarly, no matter how powerful the AI, it cannot exist without memory.
This is where South Korea's strategic value emerges. While the world focuses on the competition between the United States and China, the key components enabling that competition are supplied by South Korea. The U.S. is constructing astronomical-scale data centers to maintain its AI dominance, while China is building more AI servers to overcome U.S. sanctions. Memory is essential for the U.S. to attack and for China to defend. Whether the U.S. wins or China catches up, memory will be sold. Just as oil consumption increased during the Cold War as the U.S. and the Soviet Union competed, memory consumption will rise as the U.S. and China compete in the AI era. And the country with the oil refinery is South Korea.
Recent AI-related indicators have made this structure even clearer. The U.S. still possesses world-class AI research and development capabilities, capital markets, and platform ecosystems, while China is rapidly closing the gap. In terms of papers, patents, industrial robot proliferation, and manufacturing applications, China has already entered the global top tier. However, advanced semiconductor design, core software ecosystems, global investment capital, and innovation systems still operate primarily around the U.S. This is why the U.S. is seen as the champion of innovation, while China is viewed as the champion of efficiency.
The emergence of DeepSeek symbolically illustrates this reality. Some have referred to it as the AI Sputnik shock, but a more measured perspective is necessary. China is aggressively pursuing advancements but has not yet completely surpassed the U.S. However, what truly matters is not the current victory or defeat but the speed of the pursuit. History has always been shaped by the speed of latecomers. Japan's manufacturing sector exemplified this, as did South Korea's semiconductors, and now China's AI is following this historical trend.
From an industrial perspective, another crucial fact emerges. The U.S. needs more GPUs and data centers to defeat China, while China requires more AI servers and computing resources to catch up. HBM is necessary for both the U.S. victory and China's pursuit. Memory will be sold whether the U.S. invests or China chases. This is the structural benefit of the AI era.
Many investors focus solely on NVIDIA in the AI industry. However, a broader question arises when considering the entire industry: What will be consumed the most as the AI war prolongs? The answer is memory. If data is the new oil of the AI era, then memory is the bloodstream that moves that data. And the country that excels in producing that bloodstream is South Korea.
However, we must not stop here. Semiconductors are just the beginning. The real change is only starting now. Until now, AI has primarily existed on screens. People have interacted with AI, created documents, and generated images. But in the future, AI will emerge into the real world. It will operate factories, control robots, drive cars, manage ships, and oversee logistics. The moment AI integrates with real-world machines, humanity will enter another industrial revolution, and that revolution will be called physical AI.
Many experts predict that over the next decade, the focus of the AI industry will shift from generative AI to physical AI. If this forecast becomes reality, South Korea will find itself in a more advantageous position than expected. This is because South Korea is not only strong in semiconductors but also a manufacturing powerhouse. It has automobiles, shipbuilding, batteries, displays, precision machinery, and steel industries. While the U.S. excels in software, its manufacturing base is relatively weak, and while China has a massive manufacturing scale, it faces limitations in advanced semiconductors and global trust systems. In contrast, South Korea is one of the few countries that possesses both manufacturing and digital technology. In an era where AI operates factories, designs ships, and produces cars, the value of being a manufacturing powerhouse will inevitably rise.
From this perspective, Jeonbuk and Saemangeum take on entirely different meanings. Many have understood Saemangeum as merely a land reclamation or regional development project. However, from the perspective of the AI era, Saemangeum represents a vast strategic space. AI data centers require enormous amounts of power, humanoid robots must be trained in real environments, and autonomous driving systems need extensive testing grounds. The metropolitan area is nearing saturation, with power shortages and excessively high land costs. In contrast, Saemangeum offers vast space, ports, renewable energy potential, and the capacity for industrial complex development.
If AI data centers, next-generation semiconductor industrial complexes, humanoid robot clusters, autonomous logistics centers, smart agricultural innovation zones, and physical AI testing grounds are interconnected as a single ecosystem, Saemangeum could become not just a regional development project but a national strategic hub that redraws South Korea's industrial map. Just as Ulsan symbolized South Korea's economic growth during the industrialization era and Pangyo became a symbol of the digital revolution, the AI era requires another strategic space. This is why I propose the concept of Jeonbuk as the special capital of physical AI.
However, we must remember one crucial fact: what drives history is not technology itself but the national strategy that connects technology to a vision. In the 19th century, Britain did not dominate the world simply because it invented the steam engine first. It established a national system that connected the steam engine to railroads, shipbuilding, finance, trade, education, and industry, allowing it to stand at the center of the world. Similarly, in the 20th century, the U.S. became a superpower not just because it created automobiles and electricity first, but because it developed them into a cohesive economic system and way of life.
The AI era will be no different. South Korea's future is not guaranteed merely by producing the world's best memory semiconductors. We must connect semiconductors to AI, AI to manufacturing, manufacturing to physical AI, and physical AI to national innovation strategies. Only when industries connect and technologies converge can a new civilization be born.
South Korea's strengths are clear. It has the world's best memory semiconductors, a globally competitive automotive industry, and robust shipbuilding, steel, battery, display, and precision machinery sectors. All these industries are national assets created through decades of accumulated technology, talent, and industrial ecosystems. At this juncture, South Korea occupies a unique position that neither the U.S. nor China can replicate. The U.S. has the world's best software and platform competitiveness but a relatively weak manufacturing base. China has the largest manufacturing scale but still faces limitations in advanced semiconductors and global trust systems. In contrast, South Korea is one of the few countries that possesses both semiconductors and manufacturing capabilities.
Ultimately, South Korea must create a new national model that is neither the U.S. model nor the Chinese model. If the U.S. is the champion of innovation and China the champion of efficiency, what should South Korea become? I believe it should become the champion of trust.
In the future, AI will not just be a technology; it will become a core infrastructure that drives national governance, industry, finance, healthcare, education, and administration. In such an era, people will not simply want fast or massive AI; they will seek trustworthy AI. South Korea, based on democracy and the rule of law, possesses world-class manufacturing and semiconductor industries. It should supply memory that the U.S. cannot easily produce, offer trust that China struggles to provide, and combine AI with world-class manufacturing. This is the path South Korea must take.
Over the past century, South Korea has achieved three miracles: the miracle of industrialization, the miracle of democratization, and the miracle of informatization. Now, we stand at the threshold of a fourth miracle: the miracle of AI semiconductors, the miracle of physical AI, and beyond that, the miracle of South Korea's second founding.
In the biblical story, David was not stronger than Goliath. However, David knew where to throw his stone. South Korea must take a similar approach. There is no need to follow the U.S. path blindly or imitate China. South Korea must forge its own path.
With the world's best memory semiconductors, world-class manufacturing, trust built on democracy, and the resilience of its people to turn crises into opportunities, these four elements will become South Korea's strongest strategic assets. In an era where the two Goliaths, the U.S. and China, clash over AI supremacy, South Korea does not need to be the largest nation; it only needs to be the most necessary one. At the center of that path lies AI semiconductors, and at the end, there is a vision of physical AI, trust as a nation, and the second founding of South Korea.
This is not merely an industrial strategy. It is a new national strategy that opens the next 100 years for South Korea and a civilizational choice to pass on to future generations. South Korea's fourth challenge, moving beyond industrialization, democratization, and informatization toward the era of AI and physical AI, has just begun.
* This article has been translated by AI.
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