South Korea to invest nearly $1.2 tn in chips, AI data centres

South Korea has unveiled a national investment plan centered on semiconductors and artificial intelligence (AI), with over $576Bn in chip investment to secure global dominance and Rebalance growth.

The plan, anchored by Samsung Electronics and SK Hynix, marks Lee’s boldest push yet to align South Korea’s AI and chip ambitions with his pledge to narrow regional disparities and revive economies beyond the Seoul metropolitan area.

Samsung Electronics and SK Hynix plan to invest more than $500Bn in a new chip-making hub in southwestern South Korea, collaborating with the government’s push to bring the Artificial-Intelligence boom to less-developed regions.

The initiative envisions the creation of four new memory fabs in the Southwest, diversifying from the two companies’ current production centers, which are all in the Seoul region.

The plan breaks down into three buckets. In the memory chip bucket is $518Bn for four new memory fabs in the Southwest, plus $52Bn for an HBM (high bandwidth memory) packaging Hub in the central region.

Then there’s another $356Bn for AI data centers to be built by Korean Tech and energy behemoths such as SK, GS, and Naver through 2035.

Reference Sources

1. rappler - South Korea taps Samsung, SK Hynix in $576-billion AI chip drive to cement global leadership
2. wsj - Samsung, SK Hynix to Spend $520 Billion on Chip Plants in South Korea
3. techcrunch - South Korean tech giants commit over $550B to ease ‘ RAMageddon’
4. bangkokpost - South Korea to invest nearly $1.2 tn in chips, AI data centres
5. malaymail - ‘One-time opportunity’: Why South Korea is betting big on the AI chip boom

Takaichi Aims to Shape Legacy With Unprecedented Economic Plan

Japan's first female Premier, Sanae Takaichi, is embarking on an unprecedented plan to reshape the country's industrial base for decades to come. At the heart of her initiative is a 370Tn ($2.3Tn) investment blueprint that joins hands with the private sector with a scope and scale at least as ambitious as her mentor Shinzo Abe's famous Abenomics program.

Takaichi aims to tackle the supply side by funneling huge sums into Industries ranging from artificial intelligence (AI) and semiconductors to defense and shipbuilding.

In all, she's singled out 17 sectors critical to both economic and national security as Japan faces broader competition with China for hard power on the world stage.

However, elements of her growth strategy plan remain vague, as more than half the money will come from the private sector.

She hasn't explained how she'll make that happen, but companies already spend billions of dollars each year on plant and equipment in any case.

She also hasn't said where the public funds will come from.

Reference Sources

1. bloomberg - Takaichi Aims to Shape Legacy With Unprecedented Economic Plan

Brexit Makes Inflation Spirals More Likely, Says Bank of England Economist

The Bank of England's chief economist, Huw Pill, has warned that Brexit has made the UK more prone to "self-sustaining momentum" in price pressures, making it harder for policymakers to control the pace of price rises since the vote to leave the EU. Pill pointed to the effect of post-Brexit trade barriers and changes to the labour market since the end of free movement between the UK and the EU.

A consensus among economists is forming that Brexit has resulted in some permanent damage to the UK economy by weakening ties with the bloc. Polling also suggests that voters are dissatisfied with how Britain’s exit has gone and the Labour government is seeking to move closer to the EU.

UK inflation has averaged around 3.6% since the Brexit vote in June 2016 and has fallen below the Bank of England’s 2% target in just one month in the past five years. By contrast, inflation in Germany over the same period has averaged 2.5%, and 1.9% in France.

Reference Sources

1. bloomberg - Brexit Makes Inflation Spirals More Likely, Says Bank of England Economist
2. telegraph - Brexit has made inflation worse, claims Bank of England chief economist
3. telegraph - It’s time to stop blaming all of Britain’s ills on Brexit

The CommonWealth English daily news digest is a service curated by CommonWealth English team with the help of AI tools.  

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Uploaded by Ian Huang