South Korea to invest over $1 trillion in AI and chips outside Seoul

South Korea is set to embark on an ambitious investment drive, pouring over 1.5 quadrillion won (approximately $1.1 trillion) into artificial intelligence and semiconductor production in regions outside the capital by 2026. President Lee Jae Myung declared 2026 the year Korea becomes "so invaluable that it cannot be substituted by any other country in the world," emphasizing the pursuit of "absolute competitiveness."

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In my second year in office, I will make sure that 2026 becomes the year Korea becomes so invaluable that it cannot be substituted by any other country in the world.

The cornerstone of this initiative is the designation of the southwestern Honam region as the nation's second major semiconductor production hub, joining the existing hub in the Seoul metropolitan area. Samsung Electronics and SK Hynix are slated to invest a combined 800 trillion won in Honam to construct four semiconductor fabrication plants. This investment will also focus on building a comprehensive ecosystem, including partner companies and skilled human resources. When combined with AI data center construction and other related projects, the total investment in the Honam region is expected to reach around 896 trillion won.

Samsung Electronics CEO Lee Jae-yong highlighted Gwangju as a key site for these developments, noting the anticipated support for securing essential resources like power, water, and labor. The Blue House chief of staff indicated that the Honam region projects are targeted for completion before President Lee's term ends.

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We are planning to select Gwangju, where we are expected to receive significant initiatives, such as support for securing power, water, and workers, as a new site.

Further investments are planned for other regions. The central Chungcheong region will receive 392 trillion won to become a semiconductor packaging hub, supporting the timely construction of high-bandwidth memory (HBM) fabs and packaging facilities. The southeastern Yeongnam region is allocated 270 trillion won for AI data centers and the physical AI industry, with government support for automotive and home appliance parts companies transitioning into robotics manufacturing.

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The plan is to complete the initiative in the Honam region before Lee leaves office.