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MOTIE's National R&D Program Evaluation Steering Committee (국가연구개발사업평가 총괄위원회) voted on 22 August 2025 to exempt the K-On-Device AI Semiconductor project from South Korea's standard preliminary feasibility study (예타) requirement — the multi-agency cost-benefit review that normally gates large government R&D programs before budget submission. The exemption is a procedural accelerant, not the funding decision itself: it clears the path for MOTIE to submit the ~KRW 689.15bn program in the FY2026 budget cycle without the review that can otherwise take a year or more.
The underlying project, first outlined by MOTIE in a May 2025 (2025-05-20) policy briefing at roughly KRW 1 trillion in prospective scale, targets "full-stack" on-device AI semiconductor development: chip architecture, embedded AI software, and integration modules for four demand-anchored verticals rather than a general-purpose fab subsidy. MOTIE paired specific demand-side companies (Hyundai Motor for automotive, LG Electronics for IoT/appliances, Doosan Robotics and Daedong for machinery/robotics, and Korea Aerospace Industries for defense) directly into program planning with domestic fabless and foundry firms, aiming to build a closed domestic ecosystem loop from chip design to end-product mass production.
Severity is set at 3 (quant, based on the confirmed ~KRW 689bn / ~USD 496M scale relative to the initially floated KRW 1tn) reflecting a targeted, sector-specific R&D subsidy rather than an economy-wide fab investment instrument — comparable in structure to Korea's other post-2023 targeted industrial-technology programs (K-Chips Act, National AI Computing Center) but smaller in absolute scale than either.
alongside the K-Chips Act (investment tax credits) and the MSIT National AI Computing Center (compute infrastructure) — together forming a design-to-deployment domestic AI-chip value chain.
participants) signals the program is oriented at import substitution for foreign AI accelerators/SoCs in Korean industrial and consumer end products, not export promotion.
for the FY2026 budget bill confirmation, which will fix the final appropriated amount and program duration.
not disclosed in the 22 August announcement — watch the FY2026 budget bill for confirmation.
conditions on IP generated (as with K-Chips Act national-strategic- technology designations) is not yet specified.