Weekly Supply Chain in Asia 2026-W24 (2026-06-04~2026-06-10)

South Korea is aggressively cementing its position at the forefront of the global AI revolution, moving beyond chip design to command critical elements across the entire supply chain. This week saw the nation secure priority access to NVIDIA’s next-generation AI accelerators, formalize deep strategic partnerships spanning AI infrastructure and physical AI applications, and witness significant investments in foundational components like semiconductor substrates. While market volatility remains a concern, the concentrated strategic moves by South Korean conglomerates and government initiatives underscore a decisive push to lead in AI hardware, manufacturing, and infrastructure, reshaping the regional and global technological landscape.

This Week’s Events

South Korea’s strategic ascent in the AI hardware supply chain was underscored this week by a government-level agreement to secure priority supply of NVIDIA’s next-generation “Vera Ruby” AI accelerator. Announced on June 8th by Deputy Prime Minister Bae Kyung-hoon, this deal ensures uninterrupted GPU supplies and positions South Korea to lead in “physical AI”—the integration of AI into robotics and tangible systems—an area NVIDIA CEO Jensen Huang views as a key growth frontier where the country can excel. This government backing complements substantial private sector investments aimed at bolstering AI capabilities.

LG Group is set to acquire 10,000 NVIDIA Blackwell GPUs, a move estimated to cost trillions of Korean won, to accelerate its “AI Transformation (AX)” initiatives. This significant procurement will fuel the training of LG AI Research’s “Exaone” AI model and the development of humanoid robots by LG Electronics. This acquisition is part of a broader formalization of a mid- to long-term strategic partnership between LG Group and Nvidia, announced on June 8th. The collaboration spans physical AI, AI infrastructure, and mobility, with joint development plans for reference robots using Nvidia’s Isaac GR00T ecosystem, establishing an autonomous manufacturing ecosystem, certifying liquid-cooling solutions, and building next-generation data centers.

Further deepening this AI hardware synergy, SK Hynix and NVIDIA announced a long-term technology partnership on June 8th to jointly develop next-generation memory for global AI factories. This collaboration will focus on memory solutions for NVIDIA’s advanced platforms, including the Vera Rubin AI supercomputer and the Jetson Thor robotic computing platform. The initiative also includes applying AI to semiconductor design and manufacturing processes and advancing simulation technologies, signaling a forward-looking approach to shaping AI infrastructure. These moves highlight a trend of major South Korean conglomerates investing heavily in AI compute power, following similar large-scale commitments from other industry leaders.

The foundational components of AI hardware are also receiving significant strategic attention. LG Innotek plans to invest over KRW 2 trillion by the end of next year to expand its AI semiconductor substrate business, addressing an emerging supply shortage that mirrors constraints seen in High Bandwidth Memory (HBM). Global big tech firms and memory manufacturers are urging LG Innotek to increase capacity, with new facilities slated for Gumi, South Korea, and Hai Phong, Vietnam, aiming for mass production by 2028. This substantial investment highlights semiconductor substrates as a critical bottleneck in the AI hardware supply chain, driving a race to secure their supply.

Beyond advanced components, the physical infrastructure supporting AI is also a focus. Gaon Cable announced on June 4th that it will supply approximately KRW 35 billion worth of transmission cables for U.S. AI data center power grids, marking its first entry into this market. The company projects related sales to reach KRW 100 billion this year, boosted by existing solar power grid contracts and substantial busduct supply contracts secured by its U.S. subsidiary, LSCUS. This development addresses a critical, often overlooked, segment of AI infrastructure build-out.

Corporate strategies are also adapting to the AI boom. Samsung Electronics launched a four-week “National Appreciation Festival” starting June 8th, returning semiconductor and AI business growth to consumers via a 20% rebate in Onnuri gift certificates, estimated at KRW 400 billion. This initiative is part of Samsung’s KRW 5 trillion, five-year social contribution plan, framing its AI success as a driver for local economic revitalization and support for small businesses.

Looking Ahead

The intense focus on AI hardware supply chains and strategic partnerships will continue to shape East Asian industry. Key developments to watch in the coming weeks include:

  • NVIDIA’s supply allocation strategies and production ramp-up for its next-generation Blackwell and “Vera Ruby” GPUs, which will be crucial for meeting the surging demand from South Korean conglomerates and global clients.
  • The impact of semiconductor substrate shortages on AI chip production timelines, and the progress of LG Innotek’s significant expansion plans in Gumi and Hai Phong.
  • Further developments in securing critical mineral supply chains and infrastructure investments, particularly as companies like Gaon Cable expand their global reach in supporting AI facilities.