Korea to power regional growth with AI, chip ‘megaprojects’

South Korea unveiled a blueprint for three flagship megaprojects centered on semiconductors, AI data centers and physical AI, with investments totaling over 1.8 quadrillion won ($1.2 trillion). President Lee Jae Myung convened business leaders at Cheong Wa Dae to present the plan, which aims to create new growth engines and promote balanced regional development beyond the capital region.

W800tr southwest chip hub to anchor Korea's second chip belt; Chungcheong tapped for HBM packaging South Korea on Monday unveiled a blueprint for three flagship "megaprojects" centered on semiconductors, artificial intelligence data centers and physical AI, seeking to create new growth engines while promoting more balanced development beyond the capital region. President Lee Jae Myung convened business leaders and government officials at Cheong Wa Dae in Seoul to present the projects to the public, pledging to personally oversee their implementation and ensure their swift execution. The plan calls for 800 trillion won $520 billion for a new semiconductor belt in the southwest, 81 trillion won for a semiconductor packaging hub in the Chungcheong region and more than 1 quadrillion won for AI data centers nationwide. Samsung Electronics Chair Lee Jae-yong and SK Group Chair Chey Tae-won, whose conglomerate owns SK hynix, outlined their respective companies' investment plans. Cabinet ministers detailed support measures ranging from power and water supplies to infrastructure development and regulatory incentives. The blueprint aims to leverage the semiconductor boom to build AI-era industries and new regional growth hubs, reshaping Korea's industrial base and spreading the benefits of advanced industries beyond the Seoul metropolitan area. Lee framed the AI race as an all-out national competition, stressing that South Korea must move quickly to seize a narrowing window of opportunity, with "semiconductors, physical AI and AI data centers serving as the three pillars of the country's next great leap forward." "Only a race for speed is the way to survive. We must secure the core elements of artificial intelligence faster than any other country. Semiconductors, physical AI and AI data centers are the three pillars of a great leap forward," Lee said during the event. "The government and the private sector must bring together all their capabilities to link these elements as one and swiftly build a Korean-style artificial intelligence ecosystem." Lee said Korea must build new regional bases that connect semiconductors, AI data centers and physical AI into a single industrial ecosystem. He further pointed to the need to move beyond the country's decades-old development model centered on Seoul, saying it has reached its limits. "There is one point I would like to emphasize in particular: a strategic approach to utilizing the regions," Lee said. "As everyone knows, balanced national development has become a key survival strategy for South Korea." As one example, Lee said Korea must "secure overwhelming supply capacity in advance through large-scale new investments in regions such as the southwest," pointing out that "existing sites centered on Yongin and Pyeongtaek in Gyeonggi Province have already reached their limits." Regionally, the government plans to invest 800 trillion won in the southwest region to build four new memory chip fabrication plants for Samsung Electronics and SK hynix and establish a second semiconductor manufacturing belt outside the Seoul metropolitan area. The project will be centered on Gwangju and South Jeolla Province, which are set to merge into a single special city on July 1. In the Chungcheong region, 81 trillion won will be invested to build a semiconductor packaging hub, with government support focused on accelerating new high-bandwidth memory fabs in Onyang and Cheonan in South Chungcheong Province and HBM packaging investments in Cheongju, North Chungcheong Province, to expand the back-end semiconductor ecosystem amid soaring demand for advanced chips. The government plans to invest 550 trillion won in 8.4 gigawatts of AI data centers by 2029 and expand capacity to 18.4 GW by 2035, bringing total investment to more than 1 quadrillion won nationwide. The Korean government also presented the plan as a blueprint to foster physical AI as a national strategic industry, saying the next three years would be the "golden time" for Korea to emerge as the world's leading physical AI powerhouse. Speaking at the event, Lee underlined that the Korean government was "not trying to meet national needs by forcing companies to shoulder losses and risks, as some have raised concerns," but rather that "what the government should do is mobilize its full capacity so that companies can invest without losses and with better prospects." In particular, the plan to build a second semiconductor cluster in the Honam region has drawn sharp criticism from the opposition bloc, turning the government's industrial blueprint into a political flash point. Rep. Jeong Jeom-sig, floor leader of the main opposition People Power Party, denounced the move as "the worst form of political intervention that could shake the future of the Republic of Korea's industry." Jeong argued that the simultaneous announcement of large-scale investment plans by two competing conglomerates for the same region "itself points to a forced decision driven by government intervention." Rep. Han Byung-do, acting chair of the ruling Democratic Party of Korea, fired back, warning that the party would "take legal action without leniency against malicious black propaganda." "The People Power Party's claim reflects ignorance of the survival strategies of global companies and amounts to malicious sabotage aimed at blocking national growth," Han said. dagyumji@heraldcorp.com