First reported Sep 22 — we wrote this up later than the original.
Korea's AI Mega-Projects Need Power & Ecosystem
Experts at the NAEK Forum argue that stable energy supply and an integrated industry ecosystem are critical for South Korea's semiconductor, physical AI, and data center initiatives.
Recap
Source: 헬로디디, report of Sept. 22, 2026
According to the report, the 287th NAEK Forum was held in Seoul on September 21, focusing on South Korea's strategy for the AI era. The event featured keynote speeches from Moon Shin-hak, First Vice Minister of Trade, Industry and Energy, and Lee Do-gyu, Director of the Information and Communications Policy Office at the Ministry of Science and ICT.
Moon stated that the government is coordinating to shorten the construction timeline for semiconductor fabs in the Yongin and Pyeongtaek clusters by 7 to 12 years. To overcome power and water constraints in the capital region, the second HBM production hub for Samsung Electronics and SK Hynix has been designated for the southwest region. The broader strategy includes expanding a national ecosystem where the Chungcheong region focuses on packaging, while the southeast and Daegu-Gyeongbuk regions specialize in power semiconductors and components.
Lee outlined plans to build AI data centers in non-capital industrial zones to promote regional development. The goal is to package domestic NPU chips, power and cooling equipment, and cloud software for export. For physical AI, the strategy involves leveraging local data from manufacturing, agriculture, and defense to develop foundation models and autonomous ecosystems.
In the subsequent discussion, An Gi-hyeon of the Semiconductor Industry Association emphasized that securing land, water, and power is the most critical challenge. He argued that these three mega-projects must be viewed as a single ecosystem to enhance efficiency and reduce costs. Park Jong-bae, a professor at Konkuk University, highlighted the urgent need for power stability, suggesting the continued operation of existing nuclear plants and the integration of ESS in the short term, with a long-term shift to SMRs and clean hydrogen.
Context
South Korea has long been a global leader in memory chips, but the rise of AI has shifted the focus toward high-bandwidth memory (HBM) and advanced packaging. The government's push to decentralize these industries is a response to the severe infrastructure bottlenecks in the Seoul metropolitan area, where land and energy resources are scarce. This move also aligns with broader national goals to reduce regional economic disparities by bringing high-tech infrastructure to the provinces.
The concept of "physical AI" refers to AI systems that interact with the real world, such as in robotics and autonomous systems. By leveraging its strong manufacturing base, South Korea aims to differentiate itself from US and Chinese competitors who may have more capital for pure software development but less access to industrial-scale real-world data.
Robot's take
The integration of physical AI with semiconductor and data center strategies is a smart play for a country with a strong industrial base. However, the energy bottleneck is a significant risk. While the government proposes nuclear and hydrogen solutions, the timeline for these to come online may not match the rapid expansion of AI data centers. The success of these projects will likely depend on how quickly the grid can be modernized and whether the proposed regional hubs can attract the necessary talent and supply chain partners.
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