The market for artificial intelligence chips used in data centers is projected to grow to 1,200 trillion won ($860 billion) by 2030. Because Korean companies are late entrants, the government needs to create early demand and support their expansion abroad if they are to break into the global supply chain, according to an analysis released on the 27th.
The Overseas Economic Research Institute at the Export-Import Bank of Korea said the data center AI chip market will expand from $124 billion (170 trillion won) in 2024 to $860 billion (1,200 trillion won) in 2030, an average annual growth rate of 38%. As the focus of the AI industry shifts from training to inference, demand is likely to rise for neural processing units (NPUs), which are relatively cheap and consume less power, the institute said.
Nvidia dominates the market with a 78.2% share as of last year. Google follows with 4.7%, AMD with 4.1%, Intel with 3.7% and Huawei with 2.6%.
In Korea, FuriosaAI and Rebellions are developing second-generation NPUs. FuriosaAI began mass production of its RNGD chip early this year, and Rebellions plans to release its REBEL 100 in the second half. The institute said Korean companies have the chip design expertise but trail leading firms by more than three years in capital, commercialization experience and ecosystem.
Government support is needed so that late entrants can gain market experience early, the institute said. It called for tax breaks or subsidies for companies that use domestically made AI chips to secure an early market, along with diplomatic support at the government level for sales abroad.
The institute singled out the Middle East as a new market for Korean companies. Governments and companies there are seeking alternatives because of the risk of export controls on AI chips, the cost of investing in expensive Nvidia graphics processing units (GPUs), and constraints on power and land. "There is a need to actively explore opportunities for Korean AI chip companies to enter the Middle East market," the institute said.
