South Korea announced a major industrial strategy on Monday focused on semiconductors and artificial intelligence. President Lee Jae Myung presented plans for over $576 billion in chip investments to strengthen global leadership and support growth outside the capital region.
The initiative, led by Samsung Electronics and SK Hynix, represents the president’s strongest effort to connect national AI and chip goals with promises to reduce regional economic gaps. Lee described the plan as a major advance built on semiconductors, physical AI and data centres.
Samsung and SK Hynix will invest 800 trillion won to construct two new fabrication sites each in the southwest, according to industry minister Kim Jung-kwan. Additional funding from Gwangju and South Jeolla province will total between 5 and 20 trillion won, with another 81 trillion won allocated for a packaging cluster near Seoul.
Lee stressed the need to finish current projects quickly and expand capacity through new investments. Experts noted that moving production away from Seoul could reduce infrastructure strain but warned that new sites require significant electricity, water, logistics and skilled workers.
South Korea has benefited from rising global AI demand due to the companies’ strong position in high-bandwidth memory chips. The government also aims to double DRAM output within five years and invest heavily in AI data centres by 2029 and 2035.
Shares of both firms fell on the day amid concerns over potential oversupply. Opposition parties questioned whether the southwest focus is politically driven. Lee rejected those claims, stating the plan aims to support balanced national development.
