President Lee Jae-myung announced the strategy Monday, flanked by the heads of Samsung and SK Hynix, framing it as a "great leap forward" centred on a "triple axis" of semiconductors, physical AI, and data centres.
Samsung and SK Hynix will invest 800 trillion won ($518bn) to build two new chip fabrication sites each in the southwest, Industry Minister Kim Jung-kwan said. SK Group, GS Group, and Naver will commit 550 trillion won ($356bn) to AI data centres. Science Minister Bae Kyung-hoon announced plans for a 10-gigawatt AI data centre by 2035, pushing total investment beyond 1,000 trillion won ($648bn).
The government also earmarked 81 trillion won ($52.5bn) for a chip-packaging cluster near Seoul. Lee said the southwestern city of Gwangju and South Jeolla province would invest 5-20 trillion won ($3.2-13bn) in ancillary projects.
The opposition has criticised the plan, accusing the government of pressuring chipmakers to invest in the ruling party's traditional stronghold for political gain rather than commercial logic.
Analysis
The numbers are staggering but the politics bite harder. Lee is betting his presidency on turning the southwest into a semiconductor corridor, and he is leaning hard on Samsung and SK Hynix to do it. If the fabs deliver on schedule, South Korea locks in chip dominance for a decade. If labour shortages — the same ones Applied Digital's CEO warned about today — slow construction, it becomes the most expensive regional development project ever to miss its deadlines. The risk is not the money. It is the timeline.
