South Korea has announced a staggering nearly $1.2 trillion investment in a new semiconductor hub and AI data centres, aiming to capitalise on the global AI boom while developing its southwestern region

South Korea will invest nearly $1.2 trillion over the coming years in a major new semiconductor fabrication hub and AI data centres, President Lee Jae Myung announced on Monday, 29 June 2026.

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The ambitious public-private initiative seeks to strengthen the country’s position in the global artificial intelligence supply chain while promoting industrial development in previously neglected regions.

Samsung Electronics and SK hynix will commit a record 800 trillion won (approximately $520 billion) to establish four new semiconductor fabrication plants in the southwestern region.

The government will separately invest around 1 quadrillion won (about $650 billion) in AI data centres over the next decade.

“Speed is the only path to survival. We must secure the core elements of artificial intelligence faster than any other nation,” President Lee Jae Myung declared at the unveiling event in Seoul.

Industry Minister Kim Jung-kwan described the project as transforming the Honam region — encompassing Gwangju and the Jeolla provinces — into a second semiconductor production hub.

Samsung and SK hynix will each build two plants, with dramatically accelerated permit approvals and construction timelines to expand capacity rapidly.

Science Minister Bae Kyung-hoon added that 550 trillion won would be directed toward AI data centres by 2029, with plans for an additional 10-gigawatt facility by 2035, bringing total capacity beyond 18.4 gigawatts.

The announcement comes amid soaring global demand for memory chips driven by the AI boom, which has significantly boosted profits for South Korean chipmakers.

Analysts note the southwest’s renewable energy potential but caution about challenges including skilled labour shortages and the time required to build a complete ecosystem away from the Seoul metropolitan area.

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The massive investment reflects South Korea’s determination to maintain technological leadership in memory semiconductors while addressing regional economic disparities.