The Korean government unveiled a plan to invest at least 700 trillion won to build a regional AI chip production cluster, aiming to position Korea as a global semiconductor powerhouse.

Research priorities include AI chips, high-bandwidth memory, neural processing units, and processing-in-memory technologies to push leading-edge AI processing capabilities.

Investment allocations are outlined across multiple years: 215.9 billion won for next-generation memory by 2032; 1.27 trillion won for AI semiconductors by 2030; 260.1 billion won for compound semiconductors by 2031; and 360.6 billion won for advanced packaging by 2031.

The government pledged tax, regulatory, and infrastructure support for companies aligned with balanced regional development and urged collaboration among industry, talent, and the nation.

The initiative seeks to reduce import dependence by fostering balanced regional growth and drawing industry participants to the south, expanding domestic chip production across the supply chain.

The broader aim is strategic national mobilization in semiconductors, emphasizing sovereignty, regional diversification, and strong public-private collaboration.

Industry leaders pressed for regulatory easing to enable large-scale capacity expansion, with calls to relax cross-ownership rules between financial and industrial firms, and officials signaling gradual easing without harming anti-monopoly safeguards.

Domestic fabless activity remains around 1% of the global market, with a plan to boost collaboration between large companies and SMEs, increase openness, and grow the domestic ecosystem.

Korean fabless firms currently account for about 1% of the global market, and the strategy outlines a framework for collaboration among design-focused fabless firms, foundries, and demand-side players to attract domestic clients.

A strengthened ecosystem will center on fabless, foundry, and demanding users, including a public fabless fund via the National Growth Fund and preferential domestic procurement for national security infrastructures.

The plan includes a public fabless fund and a priority domestic-purchasing system, alongside aggressive self-reliance in defense semiconductors due to high import dependence.

President Lee Jae-myung urged balanced regional development, highlighting the south’s abundant power resources for building new semiconductor ecosystems and stressing inclusive, wide-and-deep growth over narrow gains.