Seoul: South Korea plans to develop a new semiconductor production base in the country's southwestern region through 800 trillion won (US$517.9 billion) in corporate investments that will create four memory chip fabrication plants, Industry Minister Kim Jung-kwan said Monday. Kim unveiled the investment plan to transform the Gwangju and Jeolla regions into the nation's second major semiconductor cluster, alongside the existing hub in the Seoul metropolitan area, during a national investment briefing chaired by President Lee Jae Myung at Cheong Wa Dae.
According to Yonhap News Agency, Kim emphasized that relying solely on the Seoul metropolitan area's production base is insufficient to meet the increasing semiconductor demand, citing limitations on power and water resources that hinder further expansion under current plans. The semiconductor investment forms a part of the government's "three mega projects" initiative, which involves significant investments by chip giants Samsung Electronics Co. and SK hynix Inc., among others, in semiconductors, physical artificial intelligence (AI), and AI data centers.
Kim further explained that the Chungcheong region will be developed into an advanced semiconductor packaging hub through 81 trillion won in investment to address the growing demand for packaging as chip production expands. Additionally, the Daegu and North Gyeongsang regions will be nurtured as innovation hubs for semiconductor materials, components, and equipment.
He mentioned that the government plans to assist companies in accelerating semiconductor investments by advancing the construction schedule for new fabrication plants by up to 12 years, from the mid-to-late 2040s to the mid-2030s. To facilitate this expansion, the government has committed to streamlining permits and construction procedures while investing in essential infrastructure, including electricity and industrial water supplies.
During the meeting, which was attended by Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won, Kim outlined a government-industry plan to invest 30 trillion won (US$19.4 billion) over the next 15 years. This investment aims to support the entire semiconductor value chain, from research and development and chip design to testing and manufacturing. The ambitious industrial blueprint seeks to transform the country from a global manufacturing powerhouse into a leader in the artificial intelligence era, with semiconductors, AI infrastructure, and physical AI as the core components of its strategy.