South Korea Unveils 576 Billion Dollar AI and Semiconductor Investment Drive

South Korean President Lee Jae Myung announced a sweeping national investment strategy on June 29, 2026. The plan centers on three areas: semiconductors, physical AI, and data centers.

Samsung Electronics and SK Hynix, the world's two largest memory chipmakers, committed a combined 800 trillion won, roughly $518 billion, alongside their suppliers. The capital will primarily fund the construction of two new chip fabrication sites for each company.

Additional investment is flowing to regional development. The city of Gwangju and South Jeolla province are set to invest between 5 trillion and 20 trillion won to support new production hubs. An additional 81 trillion won is earmarked for a chip-packaging cluster in the Chungcheong area near Seoul. Major conglomerates including SK Group, GS Group, and Naver pledged 550 trillion won toward AI data centers. By 2035, total data center investment is expected to exceed 1,000 trillion won, or about $648 billion, to support an 18.4-gigawatt capacity.

The government is prioritizing the southwestern region for new semiconductor clusters to ease infrastructure bottlenecks in existing hubs like Yongin and Pyeongtaek, which have reached capacity limits. President Lee framed the regional focus as a way to narrow economic disparities across the country.

Industry experts expressed caution. Building advanced fabrication plants requires specialized infrastructure, including consistent water supply, deep supplier networks, and large pools of skilled labor. Experts warn those conditions may not scale quickly enough in a new region to meet surging global demand for AI-driven memory chips.