Kim Yong-beom, presidential chief of staff for policy in South Korea, on Wednesday, 24 June called for aggressive state investment in artificial intelligence infrastructure, arguing that the country's response to the ongoing AI and semiconductor supercycle must be structurally different from past industrial policy. His remarks came at a discussion hosted by the Kwanhun Club, a senior journalists' association in Seoul, amid a stock market boom driven by record profits and gains among AI-related chipmakers.

The Case for Preemptive Investment

'If the ongoing semiconductor and AI supercycle constitutes the beginning of a structural transformation that will raise South Korea's potential growth trajectory, as well as a reorganisation of its industrial structure, our response should be different,' Kim told the gathering.

He argued that the new AI era demands new state infrastructure, urging the government to 'lay the growth foundation through preemptive investment that is aggressive enough to transform South Korea's industrial map.' The remarks signal a shift in the policy framing — from reactive industrial support to front-loaded, infrastructure-first planning.

Land, Power, and a New Regional Cluster

Kim specifically flagged the need for massive amounts of electricity, land, and water to sustain the AI buildout, noting that the capital region has effectively exhausted its capacity across all three. He suggested that regional areas could host a new industrial landscape featuring data centres, next-generation electricity networks, and allied infrastructure.

Discussions on constructing an additional semiconductor cluster beyond the one already under development in Yongin — south of Seoul — are reportedly 'nearing the final stage,' Kim said. The Yongin cluster is being built as a key production hub for advanced chips by major manufacturers including Samsung Electronics Co. and SK Hynix Inc. 'If they are finalised, (the government) would prepare an occasion to explain it ... to the public,' he added.

Sharing the Gains: Labour and Tax Policy in Focus

Beyond infrastructure, Kim raised the question of distributional equity in the AI era, calling for social discussions on how to deploy excess tax revenues and address emerging labour market disruptions. 'We have to look into how the fruits of growth in the AI era are shared,' he said, adding: 'AI could enrich a country, but there is no guarantee that all people could equally enjoy the benefits.'

This comes amid broader global debate on AI-driven labour displacement, making South Korea one of the few governments to formally link infrastructure investment with equity policy in a single policy address.

Economic Signals: Growth, Income, and Risks

On the macroeconomic front, Kim projected South Korea's real GDP growth at 3 percent year-on-year for 2025, with nominal growth potentially reaching the 10-percent range. He cited annual per capita national income approaching US$40,000, record-high corporate profits, and sustained stock market rallies as positive indicators.

However, he flagged two risks as 'new tasks': the continued depreciation of the Korean won against the US dollar, and instability in the real estate market. Both, he acknowledged, require policy attention even as the AI boom lifts headline numbers.

What to Watch Next

The government's next move will be closely tracked — particularly whether it formally announces the site and scale of a second semiconductor cluster. Industry observers and regional governments are expected to lobby actively once the decision enters the public domain. South Korea's ability to balance aggressive infrastructure expansion with fiscal discipline and social equity will be the defining policy test of its AI era ambitions.