South korea: South Korea's industry ministry announced Tuesday its proposal for a record 13.26 trillion-won (US$9.6 billion) budget for the upcoming year. The budget aims to bolster the integration of artificial intelligence (AI) within the manufacturing sector and finance significant development projects.

According to Yonhap News Agency, the 2027 budget proposal, submitted to the National Assembly, represents a 40.5 percent increase from this year's 9.43 trillion won. The Ministry of Trade, Industry and Resources emphasized that the budget's primary focus is to support AI technology adoption in manufacturing, implement the government's "megaproject" initiative, and ensure balanced regional development.

A ministry official stated, "The ministry has significantly increased funding for the manufacturing AI transition (M.AX), three megaprojects focusing on semiconductors, AI data centers, and physical AI, as well as subsidies for companies making large-scale facility investments in local provinces."

Of the total proposed budget, 8.31 trillion won will be allocated to non-research and development (R and D) programs, marking a 97.1 percent increase from last year. Meanwhile, the allocation for R and D programs will be 4.94 trillion won, experiencing a 5.2 percent decrease from the previous year.

The budget outlines that approximately 3.73 trillion won will be dedicated to the manufacturing AI transition and the three major projects introduced in June. Additionally, 2 trillion won is set aside for companies planning facility investments outside the Seoul metropolitan area.

To address potential disruptions in global supply chains for petroleum and critical minerals, the ministry plans to allocate 3.68 trillion won, an 84.5 percent increase from the previous year. Furthermore, the ministry intends to cut 1.5 trillion won from low-growth and less efficient programs, redirecting those funds to key projects.