South Korea Launches $476bn Semiconductor Plan Focused on AI Chips and Southern Industrial Expansion

South Korea has announced an ambitious semiconductor investment blueprint worth nearly half a trillion dollars, aimed at boosting its competitiveness in artificial intelligence processors and expanding chip production beyond the traditional industrial regions. The government outlined the plan during a high-level meeting, emphasizing the need to secure long-term leadership in the global semiconductor race.
The strategy includes a massive 700 trillion won ($475.8 billion) investment to build 10 new semiconductor fabs by 2047, expanding national production capacity to 7.9 million 200-millimeter wafers per month. Most of the funding will come from the private sector, supported by government deregulation and a special law to secure water supplies for chip manufacturing.
A major focus of the blueprint is shifting South Korea’s semiconductor strengths beyond memory chips toward AI processors. The government plans to invest 1.27 trillion won in AI chip development, 215.9 billion won in next-generation memory, and 620 billion won in compound semiconductors and packaging technologies. It is also considering a 4.5 trillion won public-private foundry project targeting 40-nanometer chip production to support domestic fabless designers.
The plan outlines an industrial expansion into the country’s southern region, with new clusters in Gwangju (packaging), Busan (power semiconductors), and Gumi (chip components). These zones will form a new semiconductor belt complementing existing hubs in Yongin, Cheonan, and Pyeongtaek. President Lee Jae Myung urged companies to participate in building a balanced supply chain and reducing reliance on foreign imports.
South Korea’s five-year semiconductor policy projects chip exports to grow by 20% by 2030, exceeding $170 billion. The country aims to foster at least 10 AI chip manufacturers and secure leading technologies in neural processing units and high-bandwidth memory.