South Korea unveils huge AI and chip investment push beyond Seoul

President Lee Jae Myung used a June 29 showcase to put South Korea’s industrial policy squarely in regional terms, unveiling three public-private “mega-projects” that tie semiconductors, AI data centres and physical AI including robotics to a push beyond the Seoul metropolitan area. The plan centers on a new semiconductor hub in southwest South Korea, with Gwangju and South Jeolla Province positioned as the main test case for whether high-value investment can be spread outside the capital.

The government paired the announcement with promises of support on the basic inputs that decide whether a chip plant or data centre can actually be built: power, water, land, roads, transport links, workforce training and housing. Ministries responsible for industry, science and ICT, climate and transport were set to outline those measures, underscoring how much of the project depends on administrative coordination rather than a single budget line.

The scale is striking. Local media said the broader package could exceed 1,000 trillion won, or about $651 billion, over coming years. Samsung Electronics chairman Jay Y. Lee was expected to attend as the company’s decade-long investment plan was put at 1,000 trillion won, with about 300 trillion won potentially earmarked for a new chip complex in the southwest. That broader Samsung plan also includes spending on AI data centres, batteries and displays, while SK hynix was expected to announce related spending at the same event.

The guest list showed how closely the government is linking the effort to Korea’s industrial heavyweights. Alongside Lee and SK Group chairman Chey Tae-won, representatives from LG Electronics, HD Hyundai Robotics, Korea Electric Power Corp and Korea Water Resources Corp were expected to take part. Their presence reflected the practical challenge at the center of the plan: advanced memory chips and AI infrastructure need not just capital, but reliable electricity, cooling water, industrial land and a trained workforce.

Lee has cast the southwest hub as a national survival strategy rather than a regional favor, a political argument that goes directly at South Korea’s long-running imbalance between Seoul and the rest of the country. That same logic already shaped a June 9 physical-AI kickoff involving LG Electronics, Robotis and KAIST, a 34 billion won initiative to develop world models, robot foundation models and simulator technology for industrial robotics.

The model being invoked is not abstract. Officials and local reports have pointed to Taiwan’s shift of semiconductor capacity from Hsinchu in the north to Kaohsiung in the south as a precedent for combining industrial competitiveness with regional development. South Korea now wants to see whether a similar bet can turn the AI boom into a broader industrial map, not another wave of concentration around Seoul.