By Joyce Lee
SEOUL, June 29 (Reuters) – South Korea is set to unveil three “mega-projects” to fuel its next growth phase, including a new semiconductor hub in the southwest that local media say could attract investments by Samsung and SK spanning hundreds of billions of dollars over several years.
The announcement would mark President Lee Jae Myung’s boldest push yet to align South Korea’s AI and chip ambitions with his pledge to narrow regional disparities and revive economies beyond the Seoul metropolitan area.
Lee will preside over the event, framed as a national “great leap” due to be unveiled around 0500 GMT, his office said, with ministries covering industry, science, climate and transport set to outline policy support.
Samsung Electronics and SK are expected to present investment plans, and their chairmen, Jay Y. Lee and Chey Tae-won, are among business leaders tipped to attend by local media.
Representatives of other firms including LG Electronics, HD Hyundai Robotics, Korea Electric Power Corp and Korea Water Resources Corp are also attending, Lee’s office said.
The package will span semiconductors, AI data centres and physical AI including robotics, Lee’s office said, while the president’s social media posts signalled a new chip cluster planned for the underdeveloped southwest, including Gwangju and South Jeolla province.
Local media have reported the planned investments could exceed 1,000 trillion won ($651.41 billion) over coming years.
South Korean construction and engineering shares surged in early trade ahead of the announcement on expectations the investments could drive massive regional infrastructure development.
Major cement producers Asia Cement and Hanil Cement jumped 15% and 7%. The KOSPI fell more than 2%, with both chipmakers Samsung Electronics and SK Hynix down over 4% and 3% respectively, as global tech stocks took a breather from their recent sharp rally.
PRESIDENT DEFENDS THE PLAN
Besides Samsung Electronics, South Korea is also home to SK Hynix, the world’s two largest memory chipmakers, whose high-bandwidth memory (HBM) chips are pivotal in the global race to build advanced AI systems. Both companies already operate major semiconductor facilities in and around the Seoul metropolitan area.
The government is also set to detail extensive support measures covering power, water, land, infrastructure, workforce training and housing.
Lee has defended the proposed southwest chip hub in a series of X posts over the weekend, rejecting criticism that it favours a liberal stronghold. He framed it instead as a “national survival strategy” to ease regional imbalances and expand capacity for the AI era.
“The creation of a semiconductor industrial ecosystem in (the southwest) is not a special favour for a particular region,” Lee wrote in one post.
“It is the additional creation of the most rational semiconductor industrial centre through the decisions of relevant companies under full government support.”
Industry experts say diversifying chip investment beyond Seoul could ease infrastructure bottlenecks, but warn that building cutting-edge fabs requires vast electricity and water, advanced logistics, deep supplier networks and highly skilled labour – elements that may not scale quickly enough in a new region to meet surging AI demand.
Opposition politicians have sharply criticised the plan, questioning whether the proposal is politically motivated given that 85% of voters in the region backed Lee in last year’s presidential election.
The announcement comes as Lee’s approval rating has slid for six weeks to 46.5%, according to pollster Realmeter.
($1 = 1,535.1300 won)
(Reporting by Joyce Lee; Additional reporting by Cynthia Kim and Jihoon Lee Editing by Shri Navaratnam)
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