South Korea AI Infrastructure Market Surges Toward $26.75B by 2035

PUNE, India - Aug. 17, 2026 - PRLog -- South Korea AI Infrastructure Market Growth Outlook

The South Korea AI infrastructure market was valued at USD 2.58 billion in 2025 and is projected to reach USD 26.75 billion by 2035, growing at a CAGR of 26.35% from 2026 to 2035.

Hardware Drives the Market

Hardware represented the largest offering segment in 2025, accounting for 72% of market revenue. Strong demand for GPUs, processors, high-bandwidth memory, networking equipment, storage, and AI computing systems is reinforcing South Korea's position in the AI infrastructure value chain.

Cloud Infrastructure Gains Momentum

Cloud-based infrastructure held a 48% revenue share in 2025, making it the leading deployment model. Enterprises are increasingly adopting cloud infrastructure to access scalable, high-performance computing resources. Meanwhile, hybrid infrastructure is expected to register the fastest growth as organizations seek greater flexibility and control over sensitive data.

AI Data Centers and HPC Lead Applications

AI Data Center & HPC accounted for 38% of revenue in 2025, making it the largest application segment. Generative AI followed with 32%, while Physical AI & Robotics Infrastructure and Edge AI accounted for 18% and 12%, respectively. Generative AI is expected to be the fastest-growing application as demand for foundation models, AI agents, and enterprise AI solutions increases.

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Semiconductor and Electronics Sector Leads End Use

The semiconductor and electronics industry held a 28% revenue share in 2025, followed by automotive and mobility at 20% and manufacturing at 18%. South Korea's semiconductor capabilities are particularly important for AI infrastructure, supporting applications such as chip design, manufacturing optimization, and AI-powered production.

Physical AI Creates New Opportunities

South Korea's combination of robotics, automotive manufacturing, semiconductors, and AI capabilities creates significant potential for Physical AI. AI-powered robots, autonomous vehicles, and intelligent factories can connect advanced computing infrastructure with real-world industrial environments. Automotive and mobility is also expected to be the fastest-growing end-use segment during the forecast period.

Government Investment Accelerates Development

Government initiatives are strengthening the country's AI computing ecosystem. South Korea is establishing a National AI Computing Center and plans to deploy more than 260,000 NVIDIA GPUs across government AI computing centers and major industrial companies. The government has also allocated approximately KRW 1.9067 trillion in additional AI sector funding. These initiatives are supporting domestic AI computing capacity and sovereign AI development.

Competitive Landscape

The South Korea AI infrastructure market includes major players such as Samsung Electronics, SK hynix, NAVER Cloud, SK Telecom, Samsung SDS, KT Corporation, LG AI Research, Hyundai Motor Group, Kakao Enterprise, and NHN Cloud. Their activities span semiconductors, AI memory, cloud infrastructure, data centers, enterprise AI, autonomous mobility, and robotics.

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