South Korea Announces $336 Billion AI Strategy, Eyes $650 Billion Chip Expansion

Summary

June 29, 2026: South Korea is making one of the largest technology bets in its history, committing 520 trillion won ($336 billion) to AI and semiconductor development. Officials expect total investment to grow beyond 1,000 trillion won (around $650 billion), as President Lee Jae Myung pushes to build a new chip manufacturing hub outside Seoul with support from Samsung Electronics and SK Hynix.

SEOUL. South Korea wants to become the world's AI hardware capital, and it is prepared to spend hundreds of billions of dollars trying. President Lee Jae Myung's technology strategy is about to launch three huge projects covering semiconductors, AI data centers, and robotics. According to the local media, over the coming years total investment could pass 1,000 trillion won, which roughly we can say is $650 billion. Lee outlined an aggressive technology agenda, saying South Korea's future growth will depend on advancing semiconductor production, physical AI, and large-scale AI infrastructure ahead of global competitors. The long-term investment target would be several times larger than the U.S. CHIPS for America manufacturing incentives, underscoring the scale of South Korea's ambitions.

The centerpiece is a brand new semiconductor hub planned for the southwest of the country, in Gwangju and South Jeolla province. This is going to be a big shot. For decades, the world’s two largest memory chip makers: Samsung Electronics and SK Hynix built their most advanced factories in and around Seoul. Now both companies are expected to lay out new investment plans at the launch event, and their top leaders, Jay Y. Lee and Chey Tae-won are set to attend.

Before the announcement even happened, investors were already reacting.

• South Korea’s main stock index, the KOSPI, fell more than 2%

• Shares in Samsung Electronics dropped over 4% and SK Hynix fell more than 3%

• At the same time, construction and cement stocks jumped, with Asia Cement up 15% and Hanil Cement up 7%, as traders bet on a wave of building work ahead.

President Lee has defended the plan in a series of posts online, calling the southwest hub the most sensible choice given the support his government can offer. That support includes help with power, water, land, transport, worker training, and even housing.

Not everyone agrees with him. Opposition politicians say the plan looks political rather than economic. They point out that 85% of voters in that region backed Lee in last year's election. The timing is awkward too. Lee's approval rating has fallen for six straight weeks, down to 46.5%, according to pollster Realmeter.

Industry experts also have doubts. Building a top tier chip hub from scratch needs huge amounts of electricity and water, a deep network of suppliers, and thousands of skilled workers. None of that can be built quickly, and some experts worry the new region will struggle to keep pace with how fast global demand for AI chips is growing.

The Industry Impact

Samsung and SK Hynix supply memory chips used in servers, data centers, and AI systems across the world. Their high-bandwidth memory (HBM) chips are widely used alongside Nvidia's AI accelerators in servers and data centers. The results of their biggest investment will influence semiconductor production, AI infrastructure, and competition among the world’s leading chipmakers for years to come. In that case, global chip buyers and technology companies will be watching closely to this matter.

Sources: Yonhap News Agency, the Korea Exchange (KRX), the Office of the President of the Republic of Korea, and the Ministry of Trade, Industry and Energy (MOTIE).

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