Saudi Arabia Emerges as AI Chip Hub as Seoul Boosts Semiconductor Spending

The global chip race is moving beyond the factories that manufacture semiconductors. As artificial intelligence demands more computing power, countries that can host and operate large-scale systems are becoming central to the industry’s next phase.

Saudi Arabia is positioning itself as a destination for Asian chip and AI companies, combining available energy with rapidly expanding data centers and an ambition to build a sovereign AI ecosystem. South Korean AI chipmaker Rebellions plans to establish its regional headquarters in Riyadh, marking a meeting point between a country that makes advanced chips and one seeking the capacity to run them.

Rebellions CEO Sunghyun Park told Asharq Al-Awsat that three factors make Saudi Arabia attractive: high energy availability, a commitment to developing AI infrastructure and strong ambitions in sovereign AI. Together, he said, these conditions make Riyadh a suitable base for expanding the company’s AI chip business.

The move comes as Saudi Arabia works to accommodate growing demand for computing and increases investment in data centers and AI projects. South Korea, meanwhile, is using public spending to reinforce its position in a semiconductor industry that remains a major driver of its economy.

Seoul proposed an 821 trillion won ($596.92 billion) budget for 2027, up 12.8 percent from the current year and the largest annual increase in its history. The proposal includes 21.3 trillion won for industrial water systems, electricity grids and logistics services supporting semiconductor infrastructure, as well as a dedicated 2.6 trillion won semiconductor budget. Samsung Electronics and SK Hynix are benefiting from strong demand for high-bandwidth memory used in AI systems.

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Three main factors make Saudi Arabia an attractive destination for the company: high levels of energy availability, a commitment to developing AI infrastructure, and strong ambitions in sovereign AI.