South Korea Launches Over $1 Trillion AI, Semiconductor Investment Push

Updated by Faith Barbara N Ruhinda at 1228 EAT on Monday 29 June 2026

South Korea has unveiled a sweeping industrial strategy focused on semiconductor chips and artificial intelligence, with President Lee Jae Myung pledging hundreds of billions of dollars in investments over several years to secure the country’s dominance in the global technology race.

Speaking alongside the leaders of the world+’s two largest memory chipmakers, Lee on Monday described the þinitiative as a “great leap forward”, built around a “triple axis” of semiconductors, physical AI and data centres.

“We must secure the core elements of AI faster than any other country,” President Lee Jae Myung said in a televised address.
The world’s two largest memory chipmakers, Samsung Electronics and SK Hynix, will invest 800 trillion won ($518 billion) with suppliers to establish two new semiconductor fabrication sites each in South Korea’s southwest, Industry Minister Kim Jung-kwan said.

Lee added that the southwestern city of Gwangju and South Jeolla Province would invest between 5 trillion won and 20 trillion won ($3.2 billion to $13 billion) in the projects. Kim said an additional 81 trillion won ($52.5 billion) is expected to be invested in a semiconductor packaging cluster in the Chungcheong region near Seoul.

The government also announced plans to develop AI data centres in the region, supported by 550 trillion won ($356 billion) in investments from major companies including SK Group, GS Group and Naver Corporation.

“By 2035, an additional 10-gigawatt AI data centre will be built, bringing total capacity under development to more than 18.4 gigawatts, with investments exceeding 1,000 trillion won ($648 billion),” Science Minister Bae Kyung-hoon announced.

The announcement represents the government’s most ambitious effort yet to strengthen South Korea’s AI and semiconductor ambitions while advancing Lee’s pledge to reduce regional economic inequalities and boost growth outside the Seoul metropolitan area.

The opposition has criticised the plan, accusing the government of prioritising regional politics over industrial strategy by choosing Honam — the traditional electoral stronghold of Lee’s liberal Democratic Party — as the location for a second semiconductor cluster.

Opposition lawmakers argue that the decision was influenced more by political considerations than by economic and technological factors.

They accused the government of pressuring memory chipmakers to invest in the region to strengthen political support, rather than allowing companies to determine locations based on commercial viability and business considerations.

As part of the broader initiative, the southwest region will host new large-scale semiconductor production clusters, President Lee Jae Myung said, citing the area’s abundant but underutilised power resources as one of the key factors behind the decision.

Lee defended the proposed southwestern chip hub in a series of posts on X over the weekend, rejecting accusations that the project favours a region where about 85% of voters supported him in last year’s presidential election.

-Aljazeera

Invest or Donate towards HICGI New Agency Global Media Establishment – Watch video here