South Korea launches $47.55 trillion AI mega-projects to lead global supply chain

South Korea's President Lee Jae-myung's administration has launched an ambitious "3 Big Mega Projects" initiative, committing a staggering 47.55 trillion won by 2035 to transform the nation into a pivotal hub for the global AI supply chain. This bold industrial policy, announced at a national report session, aims to propel economic growth by concentrating on semiconductors, physical AI, and AI data centers as key future growth engines. Samsung Electronics and SK Hynix are set to be the primary investors, collectively pouring in approximately 26.55 trillion won and 21 trillion won, respectively. Their investments will focus on building memory semiconductor fabrication plants in the southwestern region and establishing post-processing bases in the Chungcheong region. Additionally, the plan designates the southeastern and Daegu-Gyeongbuk regions as hubs for semiconductor materials, components, and equipment industries. For physical AI, the goal is to become a global top-three player by expanding robot production bases in Saemangeum and Daegu-Gyeongbuk and cultivating 10,000 AI robot specialists. The government's role will be crucial in facilitating these corporate investments by providing essential infrastructure, including power, water, land, and workforce development. The vision includes ensuring stable power supply, prioritizing renewable energy and nuclear power, and establishing corporate-type advanced cities to expedite large-scale regional investments. The initiative also plans to establish a future response fund, financed by anticipated tax revenues from a semiconductor boom, to invest in future industries, youth, local development, and education. This strategic pivot aligns with a global resurgence of industrial policy, evident in initiatives like the U.S. CHIPS and Science Act and the Inflation Reduction Act. Governments worldwide are increasingly intervening in their economies to secure supply chains and enhance economic security amidst geopolitical tensions and the retreat from globalization. The rapid evolution of AI technology is further intensifying this global competition, making the development of AI ecosystems a paramount concern for national economic strategies.