"Only a Physical AI Semiconductor Promotion Center Will Make K-NPUs Sell"

Kim Nokwon, CEO of DeepX: "Public buyers must be able to fully evaluate products before making purchase decisions"
AI Semiconductor Innovation Procurement Roundtable explores support measures for domestic NPUs in public procurement
Leading domestic NPU companies work to build consensus with public-sector buyers

Kim Nokwon, CEO of DeepX, is speaking at the AI Semiconductor Innovation Procurement Forum held on the 4th at the Korea Chamber of Commerce and Industry building in Seoul. Photo by Paek Jongmin, Tech Specialist

At the "AI Semiconductor Innovation Procurement Roundtable" held on the 4th at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, participants suggested that domestically produced neural processing units (NPUs), which have now reached a level where they can technically chase foreign Nvidia GPUs, still need the final pieces of the puzzle in the form of "pre-verification" and "national certification" in order to cross the threshold into the public procurement market.

At the roundtable, led by the Ministry of Science and ICT, NPU fabless companies aiming to become the "Nvidia of Korea" such as DeepX, Rebellions, FuriosaAI, Mobilint, HyperAccel, UXFactory, DifferEye, and Ainix exchanged views with public-sector demand-side organizations including Gyeonggi Province, the Korea Customs Service, Korea Midland Power, Korea South-East Power, the Ulsan Information Industry Promotion Agency, Hanyang University, and the Gwangju Institute of Science and Technology on ways to expand the adoption of domestic AI semiconductors.

Participants called for one last decisive measure to help NPU fabless companies enter public procurement. On the supply side, Kim Nokwon, CEO of DeepX, told The Asia Business Daily in a phone call right after the event, "We need to establish a 'Physical AI Semiconductor Promotion Center' where public-sector buyers can fully evaluate product performance and the potential for application development before making purchase decisions." He argued that, because there is effectively no space where buyers can pre-optimize products and gain confidence in them, a pre-verification process must be introduced.

An AI Semiconductor Innovation Procurement roundtable hosted by the Ministry of Science and ICT to support demand creation and commercialization of domestic AI semiconductors in the public sector was held on the 4th at the Korea Chamber of Commerce and Industry building. Photo by Paek Jongmin, Tech Specialist

Representing the demand side, Kim Jongwon, a professor at the Gwangju Institute of Science and Technology, asked the government to cover the "sunk costs" involved in choosing domestic NPUs over the proven alternative of Nvidia. Professor Kim suggested, "It would be ideal if the government directly verified performance and provided a clear guarantee under a brand such as 'K-Semiconductor'." His point was that demand-side organizations can respond positively only if fabless companies are not worn out by having to overcome numerous barriers just to provide technical proof.

Jang Dowon, Director of the ICT Broadcasting Technology Policy Division at the Ministry of Science and ICT, said, "In August last year, in consultation with the Public Procurement Service, we created new item names such as 'AI server' and 'AI computation card' to facilitate the smooth registration of fabless companies for procurement," stressing that regulatory hurdles such as the "factory ownership requirement," which had been a chronic barrier for fabless companies, have already been removed.

Currently, 13 products from 7 companies have completed registration on the national procurement system. The government has legally established a "purchase immunity system" under which no liability is pursued for losses arising from the introduction of innovative products, provided there is no intent or gross negligence, and is promoting domestic NPUs as a priming pump through the "pilot purchase program," which reduces budget burdens. To alleviate concerns about sunk costs, "rental and subscription-based" models, which allow users to try products without owning them, were also presented as an alternative.

Park Taewon, Director-General for Communications and Broadcasting Policy at the Ministry of Science and ICT, stated, "We will provide close support so that domestic NPUs can open the floodgates in the public procurement market as well."

This content was produced with the assistance of AI translation services.