On May 15, it was reported that the total budget for the government-led K-on-device AI (artificial intelligence) semiconductor technology development project will be cut by up to 300 billion won from the originally planned 1 trillion won. On-device AI is a technology that processes AI computation directly on devices such as smartphones or PCs without relying on cloud servers.
The Ministry of Trade, Industry and Resources planned to invest 1 trillion won in this project by 2030 to support the development of On-device AI Semiconductor for automobiles, Internet of Things (IoT) and home appliances, machinery and robots, and defense.
The budget cut was reportedly made in line with comments from the Korea Institute of Science & Technology Evaluation and Planning (KISTEP), which conducted the feasibility review. When KISTEP surveyed corporations interested in participating, it found that some projects had little to do with AI, or did not require funding on the order of 100 billion to 200 billion won.
According to ChosunBiz reporting compiled that day, the Ministry of Trade and Industry (MOTI) is expected to begin recruiting corporations to participate in the K-on-device AI Semiconductor technology development project as early as this month. However, the total budget is said to be reduced to 700 billion to 800 billion won, a 20% to 30% cut from the original plan. The total budget will be raised through contributions from the government and demand-side corporations at a ratio of roughly 7 to 3.
The budget cut reflects KISTEP's view. The project was exempted from a preliminary feasibility study by a Cabinet decision, and KISTEP instead reviewed the appropriateness of the project plan. KISTEP initially reportedly suggested reducing the total budget by about 40%. KISTEP judged that some projects proposed by corporations seeking to participate had little connection to AI. It also viewed that some projects would fall short of the government's anticipated project scale of 100 billion to 200 billion won.
By contrast, the Ministry of Trade and Industry (MOTI) opposed a 40% cut, saying the project would become unworkable, and a compromise to reduce it by about 20% to 30% was reportedly reached. The ministry is said to believe that, considering semiconductor development requires hundreds of billions to trillions of won, even the planned budget could be insufficient. A ministry official said, "It is difficult to confirm specific details. The final details of the project are under discussion."