In an unprecedented move that has shaken the global tech industry, South Korea's technology giants Samsung Electronics and LG Uplus have announced a groundbreaking collaboration to develop AI smartphones, marking a dramatic shift from their traditional rivalry to strategic partnership. For American readers, this would be comparable to Apple partnering with Google or Microsoft collaborating with Amazon on a flagship product - a development that could fundamentally alter the competitive landscape.
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The partnership, announced on September 18th, centers around the development of a "Real AI Phone" that combines Samsung's Galaxy AI technology with LG Uplus's ixi-O AI call assistant capabilities. This revolutionary smartphone is scheduled to launch alongside Samsung's upcoming Galaxy S25 series, representing a new milestone in corporate cooperation between Korea's largest conglomerates. The collaboration signals a strategic response to intensifying global competition from Apple's iPhone and Google's Pixel devices.
Korea Dominates Global AI Semiconductor Supply Chain
To understand the significance of this partnership, American readers should know that South Korea has established near-monopolistic control over critical AI infrastructure components. SK Hynix commands 50% of the global High Bandwidth Memory (HBM) market, supplying essential memory components to NVIDIA's H100 and H200 processors that power America's AI revolution. Together, SK Hynix and Samsung produce 90% of the world's HBM memory - making Korea as crucial to AI development as Taiwan is to general semiconductor manufacturing.
Samsung recently hosted the Samsung AI Forum 2025 at its Yongin semiconductor facility on September 15-16, where the company unveiled its "Vertical AI Strategy and Vision for the Semiconductor Industry." The tech giant is investing $14.3 billion (approximately 19 trillion won) in a next-generation AI semiconductor research and development center in Yongin, scheduled to become operational in mid-2025. This investment scale matches Intel's recent $20 billion commitment to Ohio facilities, demonstrating Korea's serious commitment to AI leadership.
National AI Infrastructure Investment Rivals Silicon Valley
The Korean government's AI investment strategy mirrors and potentially exceeds Silicon Valley's scale of commitment. Korea has announced a $65 billion investment plan for AI infrastructure through 2027 - a figure that dwarfs the $52 billion CHIPS Act funding in the United States. Most notably, Jeollanam-do Province is attracting the world's largest planned AI data center, a 3-gigawatt facility requiring $35 billion in investment and capable of housing up to 200,000 GPUs, with construction beginning in winter 2025.
For perspective, this single Korean data center would rival the combined capacity of all major American cloud providers' GPU clusters. The appointment of Ha Jung-woo, former head of Naver Cloud's AI Innovation Center, as the Presidential Office's first-ever AI Future Planning Chief Secretary demonstrates the government's institutional commitment. President Lee Jae-myung's campaign promise to invest 100 trillion won ($75 billion) in artificial intelligence aims to position Korea among the world's top three AI superpowers alongside the United States and China.
The display industry is also pivoting toward AI-centric innovation. At the 25th International Meeting on Information Display (IMID 2025), both Samsung Display and LG Display positioned artificial intelligence as the central theme for future display technology development. Samsung Display presented numerous AI-related research papers while LG Display delivered keynotes on technological prospects in the AI era, signaling a comprehensive ecosystem transformation beyond simple hardware manufacturing.
Strategic Response to Apple-Google Duopoly
Industry experts view the Samsung-LG collaboration as Korea's strategic response to the Apple-Google duopoly that has dominated the premium smartphone market. Unlike the competitive fragmentation seen among American tech companies, Korean chaebols (business conglomerates) are increasingly willing to combine complementary technologies to compete more effectively on the global stage.
The partnership leverages Samsung's manufacturing excellence and global market presence with LG Uplus's telecommunications expertise and AI assistant technology. This collaboration model resembles the successful alliance between Qualcomm and various Android manufacturers, but with deeper integration and shared development rather than simple component supply relationships.
For American consumers and investors, this development signals several important trends. First, the smartphone market may see renewed innovation as Korean companies challenge the established iOS-Android duopoly with differentiated AI capabilities. Second, the partnership demonstrates how national industrial policies can foster cooperation between traditionally competing companies to achieve strategic objectives. Third, it highlights Korea's emergence as a potential third pole in global technology competition, alongside American Silicon Valley and Chinese tech centers.
The convergence of Korea's semiconductor dominance, government investment, and unprecedented corporate collaboration suggests that the global AI market is entering a more multipolar phase. American technology companies may need to adapt their strategies to account for this new Korean challenge, particularly in markets where integrated hardware-software-services solutions provide competitive advantages.
As the AI smartphone market evolves, the Samsung-LG partnership represents a bold experiment in collaborative innovation that could reshape competitive dynamics well beyond Korea's borders. The success or failure of this model may determine whether similar cross-industry collaborations emerge in other technology markets, potentially challenging traditional competitive assumptions in Silicon Valley and beyond.
Original Korean article: https://trendy.storydot.kr/tech-samsung-lg-ai-partnership-sep18
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