South Korea is set to launch three major development projects aimed at driving its next phase of economic growth, including a new semiconductor hub in the country’s southwest that could attract more than 1,000 trillion won ($650 billion) in investment over the coming years.

President Lee Jae Myung is expected to unveil the package as part of what his office has described as a national “great leap”, bringing together government ministries and leading technology companies to accelerate the country’s ambitions in artificial intelligence and semiconductors.

Samsung and SK Expected to Lead Investment

According to local media reports, Samsung Electronics and SK Group are expected to announce major investment plans during the event.

Samsung Chairman Jay Y. Lee and SK Chairman Chey Tae-won are among the business leaders expected to attend, alongside representatives from LG Electronics, HD Hyundai Robotics, Korea Electric Power Corporation and Korea Water Resources Corporation.

The government said the projects will focus on semiconductors, AI data centres and physical AI technologies, including robotics.

New Chip Hub Beyond Seoul

A key feature of the plan is the creation of a major semiconductor cluster in South Korea’s underdeveloped southwest, covering Gwangju and South Jeolla Province.

The proposal reflects President Lee’s broader pledge to reduce regional economic disparities by expanding high-tech investment beyond the Seoul metropolitan area.

The government is also expected to announce extensive support measures covering electricity, water supplies, transport infrastructure, land development, housing and workforce training.

Lee Calls It a National Survival Strategy

President Lee has defended the proposal against criticism that it favours a liberal political stronghold.

Writing on X over the weekend, he argued that the southwest chip hub was essential to South Korea’s long-term competitiveness in the AI era.

“The creation of a semiconductor industrial ecosystem… is not a special favour for a particular region,” Lee wrote.

“It is the additional creation of the most rational semiconductor industrial centre through the decisions of relevant companies under full government support.”

Experts Welcome Expansion, Warn of Challenges

Industry experts say expanding semiconductor production beyond Seoul could ease infrastructure bottlenecks and strengthen South Korea’s long-term manufacturing capacity.

However, they also caution that advanced chip fabrication plants require enormous amounts of electricity, water, highly skilled workers, efficient logistics and extensive supplier networks, all of which may take years to develop in a new region.

Political Debate Intensifies

Opposition politicians have questioned whether the proposal is politically motivated, noting that around 85% of voters in the southwest supported Lee in last year’s presidential election.

The announcement also comes as Lee’s approval rating has declined for six consecutive weeks, falling to 46.5% according to pollster Realmeter.

Despite the political criticism, the government is presenting the projects as a long-term strategy to strengthen South Korea’s position in the global AI and semiconductor race while revitalising regional economies beyond Seoul.

(with input from Reuters)