South Korea Launches $2 Trillion AI and Chip Initiative

President Lee Jae Myung unveiled the Three Mega Projects for the Great Leap Forward on June 29, 2026, a strategic initiative to cement South Korea as a global AI power. The plan involves a combined investment of up to 3,200 trillion won (approximately $2.07 trillion) from Samsung Electronics and SK Hynix over the next decade. The core pillars of the strategy are semiconductors, physical AI and robotics, and the development of gigawatt-level AI data centers.

A centerpiece of the plan is the creation of a new semiconductor manufacturing hub in the southwestern Honam region. Samsung Electronics and SK Hynix will each build two fabrication plants in the southwest, with Samsung specifically designating Gwangju as its site. This move is part of a broader government effort to decentralize industrial growth away from the Seoul metropolitan area to reduce regional inequality and avoid resource bottlenecks in power and water.

To support these goals, the government introduced the 3S+1F strategy to fast-track permits and infrastructure. Other key developments include an 81 trillion won packaging hub in the Chungcheong region and the acceleration of the Yongin semiconductor cluster, with some production timelines moved forward by 12 years. Additionally, the administration announced a goal to cultivate security-technology champions by 2030, focusing on AI-enabled drones and cybersecurity.

While the government hailed industry leaders as national heroes, the opposition People Power Party criticized the plan as politically motivated. Market reactions were cautious, with shares of Samsung and SK Hynix declining due to concerns over potential future supply gluts if AI demand cools.