South Korea unveils $880bn chip and AI investment plan

South Korea has announced plans for at least $880bn (£666bn) in investments to expand chip manufacturing and AI capabilities over the coming years. The programme, called the Three Mega Projects, will focus on new semiconductor production hubs, data centres and robotics technology.

President Lee Jae Myung said the effort is intended to revive economies outside Seoul, where much of the country’s advanced manufacturing is concentrated. He described semiconductors, physical AI and AI data centres as central to South Korea’s next industrial push, and presented the plan alongside leaders from Samsung and SK Hynix.

The announcement comes as Taiwan, China and Japan accelerate spending on chip factories and related technologies amid rising demand for semiconductors. Samsung and SK Group have benefited from AI infrastructure spending by major customers including Nvidia, while Google, Amazon and Meta said they will spend $650bn into the technology this year.

Strong AI chip demand has also contributed to a global semiconductor shortage and higher component prices. SK Hynix’s stock market valuation topped $1tn in May, though investor concerns about the scale of AI spending have weighed on some shares in recent days.