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🇰🇷 South Korea /Economy & Trade

South Korea’s Industry Ministry Sets Record 2027 Budget, Focusing on AI, Chips and Resource Security

From Hankyoreh · () Korean

Translated from Korean and summarized by DistantNews. Read the original for the full story.

At a glance

News Official statement New plan
  • The Ministry of Trade, Industry and Energy proposed a 2027 budget of 13.26 trillion won, up 40.5% from the 2026 main budget.
  • The plan directs major increases to manufacturing AI, semiconductor support, resource security and regional investment.
  • The government will also establish semiconductor and resource-security funds, while some spending depends on whether an oil price cap remains in effect.

South Korea’s Ministry of Trade, Industry and Energy is seeking its largest budget since its creation, with a sharp increase aimed at turning stronger tax revenues into investment in future industries.

The ministry proposed a 2027 budget of 13.2573 trillion won, 40.5% higher than this year’s 9.4342 trillion won. Including 911.8 billion won in ministry programs under a new Future Response Fund, the effective total rises to 14.1691 trillion won, 50.2% above 2026.

This is the largest budget and the highest rate of increase since the launch of the Ministry of Trade, Industry and Energy, including the energy sector.

— Oh Seung-cheolThe ministry’s planning official described the scale of the proposed 2027 budget.

The biggest increase would go to manufacturing AI and major industrial projects. Funding for the sector would rise 128.5%, to 3.7261 trillion won. New allocations include 120 billion won for full-stack AI factories and manufacturing foundation models, 290 billion won to convert skilled workers’ know-how into AI data, and 115.8 billion won for a national manufacturing data library. Another 119.3 billion won would support an autonomous manufacturing ecosystem.

Semiconductor policy would receive a separate financial base. The government plans to create a 2.6 trillion won semiconductor special account, including 2.1 trillion won under the industry ministry. A new 1.5 trillion won package would support an integrated semiconductor cluster in the southwest following the planned administrative integration of Gwangju and South Jeolla Province. The plan also includes support for power supplies to chip clusters in Yongin and Pyeongtaek.

We adjusted underperforming and similar or overlapping programs, securing about 1.5 trillion won overall.

— Oh Seung-cheolHe explained how the ministry created additional fiscal room through spending restructuring.

Resource-security spending would rise 84.5%, to 3.6825 trillion won, covering oil stockpiles, diversified crude imports and critical minerals. The ministry plans to add 2 million barrels to reserves and expand storage capacity to 20 million barrels. A separate resource-security fund would total 1.4 trillion won.

The proposal also increases regional-growth funding, future-car and shipbuilding research, export support and trade insurance. Some oil-price stabilization funding, set at 1.4497 trillion won, could remain unused if the government does not continue its price-cap system.

If mega-special zones are designated, we plan to concentrate growth-engine subsidies and research and development support in those regions.

— Oh Seung-cheolHe described how regional funding could be targeted after special zones are selected.
About this summary

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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