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South Korea announces 700 trillion won long-term investment plan: plans to build the world's largest chip cluster

South Korea announced a long-term investment plan on Wednesday (December 10) to invest 700 trillion won (approximately US$534 billion) to strengthen its semiconductor industry, aiming to create the world's largest chip cluster and gain an advantage in the artificial intelligence (AI) chip competition.
The South Korean government hopes to transform the country's semiconductor market from a memory-based industry to a more balanced, innovation-driven ecosystem covering the entire semiconductor value chain.
At a policy briefing titled "Vision and Strategy for Korean Semiconductors in the Artificial Intelligence Era" held at the Office of the President of South Korea, President Lee Jae-myung and ministers elaborated on the government's mid- and long-term plans for ensuring chip dominance. The meeting also included senior officials from key departments, business representatives from the semiconductor industry, and academics.
semiconductor race
The core of the plan is to expand the large-scale semiconductor industry cluster under construction in Yongin City, Gyeonggi Province into a global center leading artificial intelligence-driven innovation.
By 2047, the Korean government will invest approximately 700 trillion won in building 10 new manufacturing plants, and government-led expansion of power, water and infrastructure to enhance the capabilities of the industrial cluster.
In detail, the South Korean government stated that it will accelerate research on next-generation semiconductors and committed to investing 126.8 billion won in artificial intelligence chips by 2030; 26 billion won in compound semiconductors by 2031; 36 billion won in advanced packaging technology by 2031; and 21.6 billion won in future storage technology by 2032.
The plan also proposes measures to strengthen South Korea's relatively weak semiconductor industry system. Officials pointed to the need to strengthen cooperation between chip designers and foundries and cultivate fabless companies that can compete globally.
In order to speed up the innovation process, enterprises and fabless (chip design) companies will jointly develop and commercialize device-based artificial intelligence technology.
Additionally, the government plans to establish a public fund to support intellectual property collaboration and strategic investments in fabless startups. For defense chips, which currently rely on imports for 99% of their supply, a new self-reliance project will be launched to safeguard technological sovereignty.
Kim Jung-kwan, South Korea’s Minister of Trade, Industry and Resources, stressed the urgency of the move. He pointed out, "This is a crucial moment that will determine the fate of our industry. We must mobilize all the resources of the country to win this global semiconductor race. We will support the world's leading memory chip manufacturing business while expanding the fabless ecosystem tenfold through partnerships covering design, production and demand."
Release time: 2025-12-11

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