South Korea has unveiled one of the largest industrial strategies in its history, pledging well over half a trillion dollars to dominate the next era of artificial intelligence and semiconductors. President Lee Jae Myung framed the initiative on June 29 as a national "great leap forward" built on a "triple axis" of chips, physical AI and data centres.
Samsung and SK Hynix anchor a $518 billion fab buildout
The world's two largest memory chipmakers, Samsung Electronics and SK Hynix, will invest 800 trillion won (about $518 billion) together with suppliers to build two new chip fabrication sites each in the country's southwest. A further 81 trillion won ($52.5 billion) is earmarked for an advanced chip-packaging cluster in the Chungcheong region near Seoul, while Gwangju and South Jeolla province add up to 20 trillion won more. The plan accelerates Korea's lead in high-bandwidth memory, the scarce component powering AI accelerators and the focus of SK Hynix's latest HBM4E sampling.
A 'triple axis' of chips, physical AI and data centres
Beyond fabs, the government detailed 550 trillion won ($356 billion) in AI data-centre investment from SK Group, GS Group and Naver. Science Minister Bae Kyung-hoon said that by 2035 the country aims to add a 10-gigawatt AI data centre, lifting total committed capacity beyond 18.4 gigawatts and 1,000 trillion won — roughly $648 billion. The emphasis on "physical AI" signals that robotics and embodied systems sit at the centre of the strategy, dovetailing with deepening ties such as the NVIDIA-SK Hynix memory pact.
A race for AI sovereignty
"We must secure the core elements of AI faster than any other country," Lee said in a televised address, flanked by the heads of both chipmakers. The push extends a wave of Korean AI-hardware ambition that already includes domestic accelerator makers preparing for public markets, as seen in the recent Rebellions pre-IPO round. Opposition lawmakers criticised the decision to locate a second semiconductor cluster in the Honam region, arguing it is driven by regional politics rather than industrial logic; the president defended the choice as a way to tap underused power resources and narrow regional economic gaps.
Reporting based on coverage from Al Jazeera, Reuters, CNBC and CNN.