South Korea to Launch 3 Major Economic Growth Plans, Samsung and SK to Invest 20 Trillion Won

SEOUL, June 29 (CNA) -- South Korea will announce three "mega-projects" this afternoon to drive its next wave of economic growth, including the establishment of a semiconductor cluster in the southwest, with Samsung Electronics and SK Group potentially investing over 1,000 trillion won (approximately NT$20.6 trillion) in the coming years.

According to Reuters, this is a major policy initiative since President Lee Jae-myung took office. It closely aligns South Korea's ambitions in artificial intelligence (AI) and semiconductors with political commitments to reduce regional disparities and revitalize the economy outside the Seoul metropolitan area.

The announcement event, billed as a national "great leap forward," is scheduled for 2 p.m. and will cover industry, science, climate, and transportation, with various ministries explaining related support measures, according to the President's office.

Samsung Electronics and SK Group are expected to present their respective investment plans. Local media reports indicate that Samsung Electronics Chairman Lee Jae-yong (Jay Y. Lee) and SK Group Chairman Chey Tae-won are among the business leaders scheduled to attend.

Representatives from LG Electronics, HD Hyundai Robotics, Korea Electric Power Corporation, and Korea Water Resources Corporation will also be present, the President's office stated.

The comprehensive plan covers projects such as semiconductors, AI data centers, and robotics. The President's social media posts also revealed that the new chip cluster is planned for the underdeveloped southwestern region, including Gwangju and South Jeolla Province.

The South Korean government also plans to detail comprehensive support measures covering electricity, water resources, land, infrastructure, talent training, and housing.

Over the weekend, Lee posted multiple times on X defending the southwestern semiconductor base and refuting criticism that the move favors his liberal stronghold. He framed the plan as a "national survival strategy" to alleviate regional imbalances and expand production capacity in the AI era.

"Establishing a semiconductor industry ecosystem (in the southwest) is not preferential treatment for a specific region," Lee wrote. "It is the creation of an additional semiconductor hub in the most reasonable way, based on decisions by relevant companies with full government support."

Industry experts say diversifying chip investment beyond Seoul could help alleviate infrastructure bottlenecks. However, building state-of-the-art foundries requires massive amounts of electricity and water, robust logistics, a deep supplier network, and a highly skilled workforce, elements that may not be readily available in emerging regions in time to meet the explosive demand for AI.

Opposition politicians have strongly criticized the plan, questioning whether the proposal has political motives, as 85% of voters in the region supported Lee in last year's presidential election.

Lee's approval rating has declined for six consecutive weeks, standing at 46.5% according to pollster Realmeter. (Compiled by Ku Hsiang-ping) 06/29/2023

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