The South Korean government has designated semiconductors, artificial intelligence (AI) data centers, and physical AI as its "three mega-projects" to boost potential economic growth. The plan aims to enhance semiconductor production capacity in the Seoul metropolitan area while establishing production, packaging, and power semiconductor hubs in the southwestern, central, and southeastern regions to spread growth nationwide.
On July 14, the government unveiled its "2026 Economic Growth Strategy" during a Cabinet meeting. The strategy aims to achieve a potential growth rate of 3%, rank among the top four in exports, and reach a national income of $50,000, referred to as the "3-4-5 Vision," by fostering globally competitive industries.
To start, the government plans to expedite the completion of semiconductor fabs in Yongin and Pyeongtaek, aiming to double the country's memory semiconductor production capacity within five years. The construction timelines for SK Hynix's general industrial complex and Samsung Electronics' national industrial complex, currently projected to take 12 and 7 years respectively, will be significantly shortened. By 2031, the government will invest 900 billion won to establish a "Trinity Fab" for testing advanced semiconductor materials, components, and equipment.
A total investment of 800 trillion won will be allocated to establish four new semiconductor fabs in the southwestern region, which will be developed as a second semiconductor production hub with rapid supply of power and water. Additionally, a high-tech packaging demonstration center will be built by 2030, focusing on local universities and research institutions such as Gwangju Institute of Science and Technology (GIST), Chonnam National University, and Korea Energy Engineering University.
In the central region, 156 trillion won will be invested to develop a high-tech packaging hub, including the construction of high-bandwidth memory (HBM) fabs. In Busan, 40 billion won will be invested by 2028 to establish a public fab for 8-inch silicon carbide (SiC) power semiconductors, while Gumi will see the creation of a testing bed and evaluation center for semiconductor materials and components.
Research and development (R&D) in semiconductors will be strengthened, with support for next-generation high-performance, low-power memory, neural processing units (NPU) for data centers, next-generation compound semiconductors, and advanced packaging technologies. The government aims to accelerate the training of 100,000 semiconductor professionals by expanding specialized universities and academies. A special account for enhancing semiconductor industry competitiveness will be established, with 1.7 trillion won allocated through a national growth fund.
In the AI sector, a total of 550 trillion won will be invested, including attracting investment for the construction of an 8.4 GW data center. Projects such as SK's Ulsan data center, additional regional initiatives, GS's Donghae data center, and Naver's Sejong data center are set to begin construction by the first half of 2028, with phased operations starting in 2029.
The government will also secure approximately 50,000 GPUs through government procurement, the sixth supercomputer, and a national AI computing center. A GPU allocation plan for 2027 will be proactively prepared in the second half of this year, alongside the commencement of the national AI computing center and the operation of the sixth supercomputer.
In the physical AI sector, the government will focus on developing seven leading areas, including AI factories, robotics, automotive, shipping, home appliances, drones, and semiconductors. The goal is to develop AI robots specialized for ten industries by 2028 and distribute them to 1,000 sites annually. The government plans to address challenges in the mega-project implementation process, including power supply, land, and permits, through a special committee on enhancing semiconductor industry competitiveness and an innovation support team led by the President.
To accelerate AI transformation (AX), the government aims to secure a proprietary AI model that ranks among the top 10 globally and develop a world-class AI model. In the second half of this year, user-friendly AI applications, such as chatbots, will be launched for the public, along with the development of a security-focused proprietary foundation model to address security threats.
* This article has been translated by AI.
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