# South Korea bets $880bn to win the AI era > Source: > Published: 2026-06-29 11:37:02+00:00 *South Korea has placed its biggest bet yet on the AI era. The plan commits at least $880bn over a decade to chips, data centres and robots. It is the boldest South Korea AI investment to date, and the government says speed is now the only way to survive.* President Lee Jae Myung unveiled the package on Monday in Seoul, flanked by the heads of Samsung and SK Hynix. He called the two business leaders “national heroes” and framed the spending as a matter of survival. [Bloomberg](https://www.bloomberg.com/news/articles/2026-06-28/samsung-sk-reportedly-to-invest-1-3-trillion-over-10-years) put the total at 1,350 trillion won, or about $880bn. Lee branded the effort the “Three Mega Projects”. The three pillars are semiconductors, AI data centres and physical AI. He called them the “triple axis for a great leap forward”. “Speed is the only way to survive,” he said. ## Four new chip fabs Samsung and SK Hynix will spend 800 trillion won, around $518bn, on memory chips. Each firm will build two fabs in the south-west, [Yonhap](https://en.yna.co.kr/view/AEN20260629006253320) reported. The Gwangju and Jeolla area becomes the country’s second chip cluster, alongside the Seoul hub. It is the first real break from the capital region in years. Industry Minister Kim Jung-kwan said the old model had run out of room. “Relying on a single production base in the Seoul metropolitan area is no longer sufficient,” he said, citing limits on power and water. The government will pull the new fabs forward by up to 12 years, from the late 2040s to the mid-2030s. It will fast-track permits and build out power and water supply. Seoul wants more than new ground, though. It also aims to double memory output near the capital within five years, and add 30 trillion won over 15 years for the whole chip value chain. Samsung will base its advanced packaging in the central region, where it makes the [high-bandwidth memory](https://thenextweb.com/news/sk-hynix-ships-first-12-layer-hbm4e-samples-to-ai-customers) that AI servers depend on. The map splits the work by region. The Chungcheong region becomes a packaging hub, with 81 trillion won for advanced lines. Daegu and North Gyeongsang will focus on materials, parts and equipment. Lee framed the spread as a way to end years of growth clustered around Seoul. ## A bigger grid for AI The second pillar targets compute. SK Group, GS Group and internet leader Naver will invest 550 trillion won in AI data centres. They aim to build 8.4 gigawatts by 2029, then add 10 more by 2035. Science Minister Bae Kyung-hoon called the next three years the “golden time” to lead physical AI, and said Seoul would name it a national strategic industry. Once the grid is ready, the science ministry wants to build a general-purpose “world model” for physical AI, a system that grasps how the real world behaves. SK chairman Chey Tae-won went further on his own books. He pledged 1,000 trillion won for data centres and 1,100 trillion won for chips through 2035, roughly 2,100 trillion won from a single group. He gave no firm timeline. ## Robots as the third pillar The third pillar is the robots themselves. South Korea wants to lift its share of the global humanoid market from 1% last year to 20% over time. Kim warned that China already mass-produces humanoids through regional hubs. “We must accelerate the foundation for mass production,” Kim said. To seed demand, the government will buy humanoids for education, defence and disaster response. Samsung will site its own robot work, including humanoids and in-house data centres, in Gumi. ## Why Seoul is moving now The timing is no accident. An AI-driven boom in memory demand has reshaped the maths for both chipmakers. Orders are rising so fast that capacity once planned for the 2040s may now arrive a decade early. That same crunch is hitting shoppers. A global memory shortage has driven up component costs, and last week [Apple and Microsoft raised prices](https://thenextweb.com/news/apple-to-raise-prices-as-memory-chip-shortage-bites-tim-cook-says) on some devices. Chey has warned the squeeze could last several more years. There is a domestic angle too. Lee wants to steer investment away from Seoul and into poorer regions. He cast the plan as a fix for decades of imbalance, not just an industrial bet. The country has gained hugely from AI, yet the spoils have not spread evenly, and his approval rating has slipped. ## The risk in the numbers The sums are staggering. At about $880bn, the plan equals roughly 5% of South Korea’s 2024 economic output. It dwarfs a $450bn chip blueprint from 2021 and a $400bn package from 2023. It also echoes [earlier reporting](https://thenextweb.com/news/south-korea-chip-investments-samsung-sk-hynix) on a second chip cluster, now confirmed at full scale. Markets were wary. The Kospi index pared steep losses after the news, but Samsung shares still fell nearly 5%, and SK Hynix slipped further. Analysts flagged the danger of future oversupply if memory demand cools. The wider race is fierce. The plan lands as the US pours money through its CHIPS Act and China drafts a $295bn AI buildout. Japan keeps lifting chip subsidies. Samsung’s Jay Y. Lee, whose [$647bn pledge](https://thenextweb.com/news/samsung-647bn-south-korea-investment) trailed the wider package, called it “a race against time”. One catch remains. Money alone does not build leading fabs, as one KAIST professor noted: the plan still needs power, water, talent and execution. The cash also follows a year in which [SK Hynix overtook Samsung](https://thenextweb.com/news/sk-hynix-overtakes-samsung-as-koreas-most-valuable-company) as Korea’s most valuable firm. Seoul is betting that scale, and speed, will keep it ahead. ## Get the TNW newsletter Get the most important tech news in your inbox each week.