South Korea will develop a new semiconductor manufacturing cluster in the country’s southwest through 800 trillion won ($517.9 billion) in corporate investment, part of a broader strategy to expand chip production capacity and strengthen its position in artificial intelligence technologies, Industry Minister Kim Jung-kwan said on Monday.
The investment will establish four memory chip fabrication plants across the Gwangju and Jeolla regions, creating a second major semiconductor manufacturing base alongside the existing cluster in the Seoul metropolitan area.
The plan was announced during a national investment briefing chaired by President Lee Jae Myung at Cheong Wa Dae and forms part of the government’s “three mega projects” initiative covering semiconductors, physical artificial intelligence and AI data centres.
“Relying on a single production base in the Seoul metropolitan area is no longer sufficient to meet surging semiconductor demand,” Kim said, citing constraints on electricity and industrial water supplies that could limit future expansion around Seoul.
The government said Samsung Electronics Co. (KRX: 005930), SK hynix Inc. (KRX: 000660) and other companies are expected to participate in the investment programme.
As part of the wider strategy, South Korea plans to invest 81 trillion won to develop the Chungcheong region into an advanced semiconductor packaging hub, while the Daegu and North Gyeongsang regions will focus on semiconductor materials, components and manufacturing equipment.
Kim also said the government would accelerate construction of new semiconductor fabrication plants by up to 12 years, bringing projects originally expected in the mid-to-late 2040s forward to the mid-2030s through faster permitting and construction approvals.
Authorities also pledged investment in supporting infrastructure, including electricity and industrial water supplies, to accommodate additional manufacturing capacity.
Separately, the government outlined a 30 trillion won investment programme over the next 15 years to strengthen the domestic semiconductor value chain, covering research and development, chip design, testing and manufacturing.
The announcement comes as countries worldwide increase investment in semiconductor manufacturing amid rising demand driven by artificial intelligence and efforts to secure critical supply chains. South Korea remains one of the world’s largest memory chip producers through Samsung Electronics and SK hynix, but faces increasing competition from the United States, Taiwan and China.
The investment briefing was attended by Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won, underscoring the role of private-sector investment in the government’s industrial strategy.
