Kim Jungkwan: "Semiconductors Are the Infrastructure of the AI Era... We Need to Focus Much More on Investment" (Comprehensive)

"With Korean Economy Nearing Zero Growth,
a Crucial Turning Point for Reversal"


Emphasizing Manufacturing Data Utilization and Semiconductor Investment


Limitations of Investment in the Seoul Metropolitan Area;
Local Regions Hol

Minister Kim Jung-gwan of the Ministry of Trade, Industry and Energy identified AI-driven transformation, growth centered on regional areas, and the establishment of an industrial ecosystem as the main battlegrounds that will determine the future of the Korean economy. He also warned that unless the pace of investment and innovation keeps up with the rapidly changing global economic order and industrial landscape, even the competitiveness of Korea's key industries could be shaken. In particular, amid the recent debate over “redistribution of excess profits” in the semiconductor industry, he stressed, “We need to focus even more on investment.”

During his lecture at the “49th Korea Chamber of Commerce and Industry Jeju Forum” held on the 16th at the Shilla Hotel Jeju, Minister Kim said, “Our economy is standing at a crossroads where we must reverse the trend,” and added, “We are at a point where a single wrong decision in these crucial areas could inevitably lead companies and the economy down the path to ruin.”

He pointed out Korea’s low-growth phase as a critical issue. Minister Kim stated, “We are facing a situation where the growth rate is nearing 0%,” and explained, “A zero percent growth rate means no new jobs will be created, national tax revenues will not come in, and the entire country will contract and shrink.” He emphasized that this is happening at a time of sweeping changes in global order.

Chairman Chey Tae-won of the Korea Chamber of Commerce and Industry and Minister Kim Jung-gwan of the Ministry of Trade, Industry and Energy are visiting the booth of young entrepreneurs returning to farming and rural areas at the "49th Korea Chamber of Commerce and Industry Jeju Forum" held on the 16th at Shilla Hotel Jeju. Korea Chamber of Commerce and Industry.

He named AI as the first critical battleground for the Korean economy. It is not only about leading AI technology itself but, more crucially, whether industry and society are ready to embrace AI transformation, and whether the necessary infrastructure and ecosystem for utilizing AI are established.

He particularly presented the AI transformation of manufacturing as an area where Korea can secure a competitive edge. Minister Kim said, “We didn’t invent the internet, but we made the best use of it to rise as an information society ahead of any other country,” adding, “Likewise, while the U.S. and China may invent AI, we can be better than any other nation in utilizing it.”

He further explained that we must leverage Korea’s manufacturing data to raise productivity and competitiveness in the manufacturing sector. Minister Kim stated, “The direction we need to pursue is M.AX: AI-powered transformation in manufacturing to enhance productivity using manufacturing data.” The government plans to support AI transformation across industries by forming alliances linking manufacturing companies, AI firms, financial institutions, universities, research institutions, and local governments.

He also called for boosting the pace of investment in the semiconductor industry. Minister Kim cautioned against the perception that the current semiconductor market recovery signals an overall boom for the industry, stating, “Semiconductors are a typical cyclical industry, and no business enjoys boom times indefinitely.” He added, “Just because there is a boom in semiconductors does not mean the entire industry is thriving, and if we do not speed up future investment in semiconductors, we will inevitably lose competitiveness even in semiconductors.”

Kim Jong-gwan, Minister of Trade, Industry and Energy, is giving a lecture on the topic of "Direction of Industrial Policy" at the "49th Korea Chamber of Commerce and Industry Jeju Forum" held on the 16th at Shilla Hotel Jeju. Korea Chamber of Commerce and Industry.

The second key battleground, according to Minister Kim, is growth centered on regional areas. He compared the Seoul metropolitan area to a fully-grown tree and the regions to young saplings full of growth potential, saying, “Giving more water to a big tree won’t lead to visible changes right away, but if you water a sapling, it’ll look very different after a month.”

The third battleground is an industrial ecosystem involving companies, government, research institutes, universities, and local communities. Minister Kim noted, “The weakest aspect of the Korean economy is the ecosystem approach,” and analyzed, “In the AI era, there are almost no companies that can succeed alone.” He added, “No single company can handle massive technological development and investment by itself. Even building a semiconductor plant requires electricity, water, land, and partner companies. If companies, government, universities, research institutes, and local governments remain fragmented, our competitiveness in the AI era will be at risk.”

He concluded that the ultimate stage for growth is the global market. Minister Kim emphasized, “Revitalizing regional areas through AI and creating an industrial ecosystem are, in fact, aimed at competing in the true battlefield: the global market. The economic actors who can actually move the levers of AI, the regions, the ecosystem, and the global market are the business leaders.”

After the lecture, Minister Kim had a conversation for about 30 minutes with Chey Tae-won, Chairman of the Korea Chamber of Commerce and Industry. When speaking to reporters who pointed out that discussions about investment and distribution in the semiconductor industry might appear out-of-sync within the government, he responded, “As it is a major issue, there will inevitably be different voices within the government. More investment, beyond what is currently profitable, may be necessary. To secure incentives, we must focus even more on investment.” He described semiconductors as “the infrastructure of the AI era” and stressed, “As long as the AI era continues, this will remain a vital business.”

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