South Korea’s president has launched what the government is calling a national great leap forward. Standing alongside the heads of the country’s two most powerful technology companies, Lee Jae Myung announced on Monday that South Korea would spend more than $576 billion over several years to build new chip manufacturing facilities and computing infrastructure across the country.
The announcement was made in a televised event at which Lee was joined by Jay Y. Lee, chairman of Samsung Electronics, and Chey Tae-won, chairman of SK, the group that owns the chip company SK Hynix. The presence of both men signalled that the commitment was not merely government rhetoric. The country’s largest private sector players were publicly aligning themselves with the plan from the start.
“We must secure the core elements of technology infrastructure faster than any other country,” the president said. “Semiconductors, physical computing hardware and large-scale data centres are the triple axis for our great leap forward.”
The centrepiece of the plan is the construction of a new cluster of chip manufacturing facilities in the southwest of the country, in and around the city of Gwangju and the province of South Jeolla. This part of South Korea has historically been less developed than the Seoul metropolitan area and the surrounding Gyeonggi province, where both Samsung and SK Hynix already run large chip operations. Lee has framed the southwestern expansion as both an economic priority and a matter of fairness.
Critics had accused him of favouring a traditional stronghold of his political support. He pushed back firmly. “The creation of a semiconductor industrial ecosystem in the southwest is not a special favour for a particular region,” he wrote in a series of posts on social media over the weekend before the announcement. He called it a national survival strategy designed to ease regional imbalances while expanding the country’s capacity for the years ahead.
Samsung and SK Hynix, alongside their component suppliers, will invest 800 trillion won in building two new chip fabrication plants each in the southwest region. Local governments in Gwangju and South Jeolla are also expected to contribute between five and twenty trillion won. A further 81 trillion won has been earmarked for a chip packaging facility to be built closer to Seoul.
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The two companies sit at the centre of global memory chip production. Samsung Electronics and SK Hynix together account for the world’s largest share of memory chips. SK Hynix in particular has become a critical supplier of a specialised type of chip called high-bandwidth memory. These components are essential in the most demanding computing systems being built today. Demand for them has surged as governments and technology companies around the world race to build the infrastructure needed to run advanced computing programmes and services.
That demand is precisely what makes South Korea’s timing significant. The country is not simply trying to protect a business it already dominates. It is positioning itself to capture a larger share of a market that is expanding at a pace few industries have seen before.
The plan covers three areas. The first is traditional chip manufacturing. The second is large-scale computing infrastructure of the kind used to run complex processing programmes and store and handle enormous volumes of data. The third is physical computing hardware, including robotics. Government support measures covering power supply, water, land allocation, workforce training and housing are all part of the package.
Construction and engineering companies saw their shares jump on the announcement. Asia Cement rose 15 per cent in early trading. Hanil Cement gained 7 per cent. The expectation among investors was that a plan of this scale would drive substantial demand for raw materials and building services across the southwest region for years. The main stock index, the KOSPI, fell more than 2 per cent on the same day as global technology stocks came under broader pressure, pulling Samsung and SK Hynix shares down more than 3 and 4 per cent respectively.
As Reuters reported , Lee’s approval rating had slipped six weeks in a row to around 46.5 per cent according to polling firm Realmeter before the announcement. The mega-project launch represents an attempt to reassert economic momentum and give voters a concrete vision of what his administration is trying to build.
The scale of what has been committed is striking when placed against the investments being announced elsewhere. The United States government has been working with domestic chip companies to build new fabrication capacity at home. Taiwan, home to TSMC which makes chips for Apple, Nvidia and many others, remains the dominant force in the most advanced chip production globally. Japan has attracted significant investment through government support programmes of its own. Into that competitive landscape, South Korea is now inserting a programme that its president has described as a matter of national survival.
Whether the factories get built on schedule, whether the government support measures prove effective and whether demand for the chips they produce holds at the levels being assumed all remain open questions. But the scale of Monday’s commitment, backed by the two largest names in South Korean industry, makes it one of the most significant economic announcements any government has made this year.
About the Author
Marcel Chidozie is a tech analyst and writer covering foreign news, fintech, and emerging technologies at TechRegard. Based in Nigeria, He's passionate about translating complex tech developments into compelling, accessible stories for diverse audiences. His work focuses on how technology shapes innovation across Africa and globally.
