President Yoon Suk Yeol on Tuesday rolled out a massive spending package to nurture the domestic chip industry and bolster artificial intelligence technology deployment through the AI-Chip Initiative.

By 2027, Seoul will spend 9.4 trillion won ($6.94 billion) on AI chips, which are chips sophisticated enough to perform AI tasks and those that use AI technology to achieve greater power efficiency. The country will also introduce a new 1.4 trillion-won fund to spur the development of innovative technologies.

Yoon also pledged to create a presidential committee for national AI strategy to foster public-private cooperation, in a country where semiconductor-related goods account for about 20 percent of total exports.

These AI chip strategies and spending packages will enable South Korea to achieve the goal of taking a 10 percent market share in the world's processing chip market by 2030 and become one of the world's top three countries in AI.

The latest estimate by the state-backed Korea Institute for Industrial Economics and Trade showed that Korea's market share in the processing chip market by revenue stood at 3.3 percent in 2022, placing itself behind the United States, Taiwan, Japan and China.

"We have dominated the world with memory chips over the past 30 years, and for the next 30 years, we will reach a new milestone with AI chips," Yoon said during a meeting with chip industry leaders at his office in Seoul.

Also attending the meeting were Lee Jung-bae, president of Samsung Electronics' device solution division that oversees the semiconductor business; Kwak Noh-jung, chief executive officer of SK hynix; Choi Soo-yeon, CEO of Naver; and Ryu Soo-jung, CEO of artificial intelligence chip venture Sapeon.

Yoon discussed US consultancy firm Gartner's projection that by 2027, the world's AI chip market will double in size compared to 2023.

"It is no exaggeration to say the future of the world's semiconductor industry lies in AI," Yoon said.

South Korea is already home to semiconductor powerhouses such as Samsung Electronics and SK hynix.

In the fourth quarter of 2023, Samsung and SK hynix combined sold 77.3 percent of the world's DRAM products, and 58.2 percent of the world's NAND, according to an estimate by Taiwan-based market intelligence provider Trendforce.

Moreover, Samsung's foundry business has the second-highest revenue in the world, tailing Taiwan's TSMC.

Yoon said now is the time for the country to set its sights on next-generation semiconductor products, such as high-bandwidth memory products with processing-in-memory features, as well as neural processing units and neuromorphic devices, both designed to run machine learning algorithms.

The meeting was a follow-up to the president's policy debate in January when Yoon announced that the semiconductor chip cluster in the southern suburb of Seoul would draw 622 trillion won in spending from the public and private sectors together by 2047 and create 3 million new jobs.

Among the investments announced, about a quarter will be undertaken in the next five years, while nearly 1 million new jobs will be created, Yoon said in January.

To this end, Yoon on Tuesday reaffirmed his conservative government's pledge to start the construction of a new national industrial complex in Yongin, Gyeonggi Province, adding that the country is poised to meet the increase in the demand for electricity and water in the city's complex site.

Meanwhile, during the meeting, Yoon said his administration is monitoring the Taiwan earthquake's fallout on the South Korean chip supply chain, as the strongest quake in 25 years with a magnitude of 7.4 hit on April 3, disrupting the operation of some TSMC chip plants.

"The government is closely monitoring the situation in Taiwan," Yoon said. "The quake's impact on South Korean companies has not been big so far, but we need to remain keen with no complacency because it is hard to predict what is coming next."