Kim Yong-beom, chief of the Cheong Wa Dae Policy Office, delivers opening remarks at the Kwanhun Club forum at the Press Center in Jung-gu, Seoul, on June 24. [Yonhap]
Kim Yong-beom, chief of the Cheong Wa Dae Policy Office, delivers opening remarks at the Kwanhun Club forum at the Press Center in Jung-gu, Seoul, on June 24. [Yonhap]

Kim Yong-beom, chief of the Cheong Wa Dae Policy Office, said semiconductor production capacity is "both a corporate asset and a national strategic asset," outlining the role he believes the state must play in the AI era.

In a Facebook post Saturday titled "Production Capacity Is the New National Power," Kim said the AI revolution is fundamentally a production revolution. "Ultimately, the country that dominates the market will not be the one with the best technology, but the one that converts that technology into large-scale production capacity the fastest," he said.

He noted that countries around the world have entered a race for production capacity, and said the current global semiconductor supply shortage could give late-movers an opening to grow.

"To maintain and expand South Korea's advanced memory chip production base, we need sustained capacity expansion centered on domestic memory chip companies," Kim said. "This is not only investment to meet growing demand — it is also strategic investment to defend our current market share and technological lead."

He described fab scale-ups as "not simply growth investment," but rather "strategic investment that translates technological advantage into market share, prevents late-movers from securing customers and volume, and stops the foundation for a technological catch-up from forming."

The remarks were widely seen as an effort to underscore the importance of the government's three major mega-projects in the semiconductor sector.

"The Yongin semiconductor cluster, the advanced fab scale-up in Pyeongtaek, and the investment plan for a second cluster in the Honam region worth 800 trillion won are difficult to view simply as corporate capital expenditure," Kim said. "They are closer to national projects aimed at securing future production capacity — an unprecedented scale of production-base investment in South Korea's industrial history," he added.

He also said what the state must protect is not any specific company, but South Korea's advanced semiconductor production base and its competitiveness. "Companies must deliver results through technological innovation and market competition, but the state has a responsibility to build and defend the industrial foundation on which that competitiveness can be realized," he said.

Kim went on to say that state-provided systems and infrastructure must accompany private investment. "Fiscal support and tax incentives can play an important role in companies' long-term investment. But in the production capacity race of the AI age, the more critical resource that only the state can supply is time," he said. "Companies cannot resolve on their own issues involving power grids, water supply, transmission networks, national industrial complexes, transport networks and complex permitting procedures. These infrastructure systems and regulatory frameworks are a production base that only the state can build and coordinate."

"The center of national strategy should lie not in short-term market cycles but in defending long-term production capacity and strategic position," Kim said. "The state's role, therefore, is not to invest on behalf of companies — it is to remove, in a timely manner, the bottlenecks that companies cannot clear on their own, so that they can sustain long-term strategic investment."

He added that the AI revolution represents "a tremendous opportunity" for South Korea, but warned that if production capacity fails to keep pace, "that opportunity could instead fuel the growth of late-movers." Clearing bottlenecks in power, water, transmission networks, permitting and industrial infrastructure so that companies can secure production capacity as quickly as possible, he said, "is the role that only the state can play."


moone@heraldcorp.com