South Korea Launches $2 Trillion AI and Chip Mega-Projects

President Lee Jae Myung unveiled the "Three Mega Projects for the Great Leap Forward" on June 29, 2026, a massive industrial strategy to secure South Korea's leadership in artificial intelligence. The initiative focuses on three pillars: semiconductors, physical AI and robotics, and AI data centers. In a coordinated effort, Samsung Group and SK Hynix pledged combined investments reaching up to 3,200 trillion won (approximately $2.07 trillion) to expand domestic capacity, including a goal to double DRAM production within five years.

A centerpiece of the plan is a new semiconductor hub in the southwestern Honam region, specifically Gwangju and South Jeolla Province, where the two companies will each build two fabrication plants. This strategy aims to decentralize industry away from the Seoul metropolitan area to reduce regional inequality. Additional investments target a semiconductor packaging hub in the Chungcheong region and the acceleration of the Yongin semiconductor cluster, with some construction timelines moved forward by 12 years.

To support these goals, the government introduced a "3S+1F" strategy (speed, stronghold, spearhead) to fast-track permits and infrastructure. Parallel to chip production, the government intends to invest over 1,000 trillion won by 2035 to expand AI data center capacity to 18.4 gigawatts. While President Lee labeled corporate leaders as "national heroes," the opposition People Power Party criticized the plan as politically motivated. Meanwhile, investors reacted with caution, as Samsung and SK Hynix shares dipped due to fears of potential future supply gluts if AI demand cools.