Foreign direct investment (FDI) filings in South Korea increased by over 10% in the third quarter of this year, with actual investment arrivals reaching a record high. This surge is attributed to continued foreign investment in advanced industries such as semiconductor materials, components, equipment, and artificial intelligence (AI) data centers.
According to the Ministry of Trade, Industry and Energy, the total FDI filings from January to September 2026 amounted to $22.9 billion, marking a 10.8% increase compared to the same period last year. This figure represents the third-highest level of FDI filings on a cumulative basis for the third quarter.
The actual investment arrivals totaled $14.87 billion, reflecting a 30.6% increase and setting a new record for the third quarter.
By type of investment, greenfield investments, which involve building or expanding factories or business sites, reached $18.52 billion, up 4.0%. This marks a recovery from a 19.8% decline in greenfield investments in the first quarter. Meanwhile, mergers and acquisitions (M&A) filings surged by 53.1% to $4.38 billion.
The increase in M&A investments was even more pronounced in actual arrivals. Greenfield investment arrivals decreased by 4.9% to $7.89 billion, while M&A arrivals skyrocketed by 126.0% to $6.98 billion.
Sector-wise, FDI filings in manufacturing fell by 34.5% to $5.72 billion, with declines of 28.1% in the chemical sector and 38.5% in electronics. Conversely, investments in machinery and precision medical equipment soared by 145.1% to $940 million. The service sector saw filings rise by 27.8% to $14.21 billion, with financial and insurance investments at $5.36 billion, up 29.8%, and information and communication, including data centers, increasing by 35.8% to $2.43 billion.
Investments in electric, gas, water, environmental cleanup, and construction sectors, which include clean energy projects, surged by 279.5% to $2.95 billion.
By country, filings from the United States rose by 35.1% to $6.69 billion, driven by significant investments in semiconductor materials and data centers. The European Union saw a 3.9% decline to $2.41 billion, while Japan and China experienced decreases of 47.9% and 39.7%, respectively.
Actual arrivals in manufacturing saw a substantial increase, totaling $6.25 billion, up 110.6%. The chemical sector recorded a remarkable 256.6% increase to $4.76 billion, and the pharmaceutical sector benefited from a 129.0% rise in investments. Service sector arrivals grew by 5.6% to $8.37 billion, with information and communication investments increasing by 62.7% to $1.76 billion.
Regionally, there was a disparity between investment filings and actual arrivals. Filings in the capital region reached $12.89 billion, up 43.7%, while non-capital regions saw filings increase by 25.8% to $4.75 billion. However, actual arrivals in the capital region rose by 58.2% to $12.88 billion, while non-capital regions experienced a 39.4% decline.
The capital region accounted for 86.7% of total investment arrivals. Although filings in non-capital regions increased, there remains a significant gap in the speed at which these investments translate into actual funding.
The government plans to leverage the expanding domestic investment opportunities, including three major mega-projects and regional growth engines, to attract foreign investment through diverse investor relations activities.
A ministry official stated, "We will actively promote domestic and international investor relations, such as the Invest Korea Summit, to sustain the momentum of foreign investment in promising sectors like semiconductor materials, components, equipment, and data centers. We will also enhance support to resolve on-site challenges faced by foreign-invested companies, facilitating not only new investments but also actual arrivals and increased investments."
* This article has been translated by AI.
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