South Korea has announced a sweeping investment plan worth approximately $1tn (£760bn) to dramatically expand its semiconductor manufacturing and artificial intelligence infrastructure. The initiative, dubbed the Three Mega Projects, targets the development of new chip production hubs, AI data centres, and robotics technology, according to President Lee Jae-myung.
Lee announced the plan on Monday in a televised event alongside the leaders of Samsung and SK Hynix, the country's two largest chipmakers. The companies are expected to build a semiconductor manufacturing hub in the south west of the country. The plan is aimed at rejuvenating the economies of areas outside the capital Seoul, where most of the country's advanced factories are currently concentrated. Earlier, Lee stated that the project was a matter of "survival" for the country to address the decline in rural areas due to the concentration of industries in Seoul. "Now, we must break this long-standing cycle of discrimination and marginalisation - not only for the sake of justice and equity, but also to ensure sustainable and inclusive growth," he wrote.
Three Mega Projects and Global Context
The investment comes as regional rivals Taiwan, China, and Japan are heavily investing in chip factories and other technologies amid the AI boom driving demand for semiconductors. "We must secure the core elements of AI faster than any other country," Lee said. "Semiconductors, physical AI, and AI data centres are the triple axis for a great leap forward." The plan includes building AI infrastructure hubs outside of Seoul to decentralise the country's industrial base.
Samsung and SK Group, which count AI chip giant Nvidia among their customers, have been major beneficiaries of the surge in spending on AI infrastructure. SK Hynix's stock market valuation topped $1tn in May, driven by the AI data centre boom. The surge in demand for chips has led to a global shortage of semiconductors, sending prices higher. Last week, Apple and Microsoft raised the prices of some of their devices due to higher component costs.
Industry Investment and Market Response
Meanwhile, US tech giants — including Google, Amazon, and Meta — have said they will spend $650bn into AI technology this year, according to the report. However, some investors have raised concerns about the huge amounts of money being poured into AI, which has triggered some shares to slide in recent days. The table below summarises key investment figures mentioned in the plan.
| Entity | Investment / Valuation | Context |
|---|---|---|
| South Korea (government plan) | ~$1tn (£760bn) | Three Mega Projects: chip hubs, data centres, robotics |
| US tech giants (Google, Amazon, Meta) | $650bn (this year) | AI infrastructure spending |
| SK Hynix | $1tn (market cap in May) | Driven by AI data centre boom |
"We must secure the core elements of AI faster than any other country. Semiconductors, physical AI, and AI data centres are the triple axis for a great leap forward." — President Lee Jae-myung
The plan reflects the intensifying global competition to dominate the semiconductor and AI supply chains, with South Korea positioning itself as a key manufacturing hub.
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