South Korea plans broad AI and chip buildout outside Seoul
President Lee Jae Myung’s plan puts new fabs, packaging sites and AI data centers at the center of a regional industrial push.
By Daniel Okafor · Business Editor
3 min read
South Korea announced a wide industrial investment drive on Monday aimed at expanding semiconductor production and artificial intelligence infrastructure, according to Al Jazeera and Reuters. President Lee Jae Myung said the program is meant to strengthen the country’s position in chips and AI while steering more economic activity beyond the Seoul area.
Lee presented the plan alongside the heads of Samsung Electronics and SK Hynix, described by Al Jazeera and Reuters as the world’s two largest memory chipmakers. In a televised address, he said South Korea must move faster than other countries to secure the core parts of AI.
The initiative focuses on what Lee called a “triple axis” of semiconductors, physical AI and data centers, according to Al Jazeera and Reuters. The announcement is the most expansive effort yet by Lee’s government to connect its technology goals with a promise to reduce regional economic gaps.
Chip sites and data centers
Industry Minister Kim Jung-kwan said Samsung Electronics, SK Hynix and suppliers plan to invest 800 trillion won, or about $518 billion, to build two new chip fabrication sites each in South Korea’s southwest, according to Al Jazeera and Reuters.
Lee said Gwangju and South Jeolla province would also put 5 trillion to 20 trillion won, or about $3.2 billion to $13 billion, into the projects. Kim said another 81 trillion won, or about $52.5 billion, is expected for a chip-packaging cluster in the Chungcheong area near Seoul.
The government also laid out plans for AI data centers in the region. Science Minister Bae Kyung-hoon said SK Group, GS Group and Naver would back the data center effort with 550 trillion won, or about $356 billion, in investment, according to Al Jazeera and Reuters.
Bae also said that by 2035 an additional 10-gigawatt AI data center would be built, with total investment exceeding 1,000 trillion won, or about $648 billion. Al Jazeera and Reuters reported his comments as part of the government’s broader data infrastructure plan.
Political dispute over location
Lee said the southwest would host large new chip production clusters in part because of power resources in the area that have not yet been fully used, according to Al Jazeera and Reuters. The plan places a major industrial bet in Honam, a region that has long supported Lee’s liberal Democratic Party.
Opposition figures have criticized the decision, saying the choice of a second semiconductor cluster in Honam reflects political calculation more than industrial planning, according to Al Jazeera and Reuters. They have accused the government of pushing memory chipmakers toward the region instead of letting companies choose locations based on business needs.
Lee rejected that criticism in posts on X over the weekend, according to Al Jazeera and Reuters. He denied that the plan was designed to reward a region where 85 percent of voters backed him in last year’s presidential election.
This story draws on original reporting from Al Jazeera.