In the context of a profound reshaping of the global semiconductor and AI industries, South Korea has introduced a national-level industrial plan that spans two to three decades.
On June 29th, South Korean President Li Jae-myeong presided over a "National Report Meeting on Three Major Projects" at the Presidential Palace. Storage semiconductors, physical artificial intelligence (AI), and AI data centers were identified as the three core pillars of the project. Plans are to make large-scale investments in non-capital cities such as Hunan, Chungcheong, and Yeongnam. It is estimated that the total investment could exceed 2,000 trillion Korean won, with total long-term investments by companies reaching 4,700 trillion Korean won.
Lee Jae-myung stated that the three major projects will be responsible for South Korea's development in the next 20 to 30 years. The Blue House has defined these projects as 'significant projects' of Lee Jae-myung's government, and has stated that it will make every effort to advance these projects.
On June 29, 2026, local time, in Seoul, South Korea, President Li Jae-myung presided over the launch event for the “Super Project”. IC photo
The “three major super projects” introduced this time target the core tracks of global technological competition. They also align with Lee Jae-myung’s strategy of “five major cross-regional metropolitan areas and three special autonomous provinces”.
Semiconductors are a core pillar of high-end manufacturing in South Korea. This plan will achieve regional expansion of the country's semiconductor production capacity. Since the power and water supply capabilities of existing semiconductor industries in Seoul and Incheon are approaching their limits, South Korea needs to find new locations for investment. Currently, the region around Hunan is proposed to become the "second production base" after the capital area.
According to the investment plans announced by the government and companies such as Samsung and SK on that day, Samsung Electronics and SK Hynix will invest a total of 800 trillion won to build four new semiconductor wafer factories. Both companies have planned two production lines for each factory.
Meanwhile, the South Korean government has decided to complete the construction of semiconductor production bases in the capital region ahead of schedule. The completion dates for the last wafer factory in the Yeongdeungne National Industrial Park and the general industrial parks will be postponed by 7 years and 12 years respectively. The goal is to double the production capacity of memory chips within 5 years. In addition, South Korea will establish an advanced packaging center with a total investment of 81 trillion won in the Chungcheong region.
In terms of AI computing infrastructure, three domestic companies—SK, GS, and Naver—have announced plans to invest 550 trillion Korean won in the future. In the first phase, they will build AI data centers with a total capacity of 8.4GW. These projects will be implemented in Ulsan, Donghae, and Sejong. By 2035, South Korea will further construct 10 terawatts of computing facilities, bringing the total capacity to 18.4 terawatts and an investment exceeding 1000 trillion Korean won.
In the field of cutting-edge physical AI, South Korea has set its own technological development goals. It plans to develop domestic physical AI models that reach international advanced levels within three years, but no specific investment timeline or scale has been announced.
The South Korean government has decided to establish a mass production system for humanoid robots centered around the New Wanjing area. Hyundai Motor Group will build a robot manufacturing plant and a components industry cluster in New Wanjing. They will also assist automotive and home appliance component companies in the Daegu Gyeongbuk region in transforming into robot component companies, providing them with support for related technology development and testing.
In terms of the overall investment scale, the total investment amount for the three projects announced by companies at this report meeting was approximately 1500 trillion yen. Samsung and SK revealed long-term independent investment plans worth a total of 4700 trillion yen. Among them, Samsung invested 2655 trillion yen, while SK invested 2100 trillion yen.
Observers say that South Korea's move is aimed at turning the AI boom into a lasting industrial advantage, and to keep up with China's pace. Currently, the global AI industry is experiencing explosive growth, driving a continuous surge in demand for memory chips. Experts from Hanyang University in South Korea believe that the current global demand for memory chips is about twice the supply. By 2035, this ratio is expected to increase to 2.5 times.
Li Zaiming said on that day that, against the backdrop of escalating global AI competition, South Korea must adopt a 'speed strategy' to seize industrial advantages.
He said that he will appoint a direct project manager within the Blue House, and he himself will be in charge of the project's progress to ensure its swift implementation. He promised that the President will lead the effort to quickly implement “one-stop administrative approval,” and that, in accordance with the Special Semiconductor Act, priority will be given to ensuring the supply of core infrastructure such as electricity and water for local industrial projects.
According to the Hankook Ilbo, President Lee Jae-myung is investing effort into the 'three major projects' because he believes that these initiatives can not only seize future growth opportunities in sectors like semiconductors, but also contribute to the balanced development of the country.
However, according to the ‘Korean Daily News’, regarding this investment, the Blue House and the ruling party have put forward various demands regarding timing, scale, and the choice of location, showing a stance of interfering in the decision-making process.
The opposition party criticized that this is politicizing the country’s core strategic industries. Park Seong-un, the chief spokesperson for the National Force, described it as “the worst form of state-owned economy,” saying, “Lee Jae-myung’s regime uses local balanced development as a cover for guiding or pressuring companies’ investment directions.” Lee Jun-hee from the Reform New Party argued that “the government is forcing Samsung and SK to invest in the Hunan region.”
This project has led to a clear polarization in regional public opinion. The southwestern region of South Korea welcomes it, viewing it as a “historic turning point”. In the eyes of local residents, the establishment of a large-scale semiconductor industry will curb population outflows, create numerous job opportunities for young people, and stimulate local economic vitality. The ruling Democratic Party stated that this is a “national strategy that combines regional balanced development with future industrial needs”.
However, regions such as Chungcheong, Gyeonggi, and Gyeongsang, which originally benefited from the semiconductor industry, have seen public opposition and concerns. Some members of parliament questioned the transparency of the project's location selection criteria, pointing out that the existing semiconductor production capacity in Pyeongtaek and Yeonju is still under construction. The government's deliberate diversion of industrial resources is seen as an act of interference.
Gyeongsangbuk-do and Daejeon-Gyeongbu region have issued a warning, stating that the construction of a new wafer factory in Hunan will lead to the forced relocation of more than 470 semiconductor-related enterprises in the area, causing devastating damage to the regional economy. Daejeon Mayor Candidate Choe Kyung-ho said: "Today's government announcement is not about national balanced development, but rather a development that is almost like national division."
Some in the ruling party also worry that the argument of regional marginalization might be amplified. A Democratic legislator said that if the current government's special treatment for Hunan is made known, Democratic candidates from areas outside Hunan may face tough competition in the 2028 congressional elections.
Compared to political controversies, practical challenges at the industrial implementation level are the core factors that determine the success or failure of super projects. The president of the Korean Semiconductor Industry Association stated that building a semiconductor factory typically requires more than seven years of review of the site, and the entire process must be kept strictly confidential to avoid issues such as high land prices and market fluctuations that could affect the progress of the project.
A shortage of high-quality talent is a major challenge facing the project. Even in Chungcheongbuk-do, which is close to the capital area and has a solid industrial foundation, with over 300 semiconductor companies such as SK and DB HiTek, the problem of talent shortage remains severe.
Many companies are unable to fully staff their positions with a variety of professionals, from low-skilled operators to those responsible for equipment maintenance, engineers, researchers, and administrative staff. A semiconductor downstream processing company, which does not specialize in different job roles, is constantly posting job advertisements throughout the year. Firms that do not have their own manufacturing facilities face difficulties in recruiting master's and doctoral degree holders, so they have recently started hiring talent from Southeast Asia.
Semiconductor industry experts said: 'At present, even Liichuan and Hepo, which serve as southern limit lines, are considered to be too far apart geographically, leading to many complaints. In the Hunan region, the issue of talent is likely to become an even greater challenge.'
As for the manufacturing of HBM, its development and production processes are closely linked. Therefore, a large number of developers must be stationed on-site during the production process. Thousands of employees will need to live near semiconductor wafer factories for several years. Thus, living conditions are of great importance. The industry believes that South Korea currently does not have any areas that can immediately meet all these requirements. This is why some say that at least a long-term infrastructure construction period of 10 years is necessary.
Ironically, this “ten-year time difference” has become a link that brings the government and the semiconductor industry together to find a compromise. The South Korean government abandoned its original “Yeonju Semiconductor dispersion theory” and provided locations and infrastructure that can play a role in “post-Yeonju development”. Meanwhile, semiconductor companies have solved the difficult problem of choosing locations for their next stages of operations.
Currently, after military airports have been relocated to places like Wusan, the remaining Gwangju military airport is considered a strong choice for its location. The key issue is whether it is possible to reliably complete tasks such as infrastructure construction, which take at least 10 years. Considering the volatility of the semiconductor industry, any hastily formulated large-scale investment plans could be undermined when semiconductors enter a downward cycle in the future. This is also a variable that needs to be taken into account.
