South Korea has laid out one of the largest industrial strategies in its history, unveiling a sweeping plan to pour more than $1 trillion into semiconductors, artificial intelligence and data centres over the coming years. The announcement, led by President Lee Jae Myung and reported by Al Jazeera, Reuters, CNN and CNBC on June 29, 2026, centres on a "triple axis" of chips, physical AI and data infrastructure.
Flanked by the leaders of the world's two biggest memory-chip makers, Lee framed the initiative as a race the country cannot afford to lose. "We must secure the core elements of AI faster than any other country," he said in a televised address, casting the package as a "great leap forward." For more context on this story, see our ongoing latest AI developments.
Three mega-projects, anchored by the memory giants
Reuters reported that the strategy is built around three chip and AI "mega-projects," and the headline commitment comes from Samsung Electronics and SK Hynix. Together they will invest 800 trillion won (about $518 billion) alongside their suppliers to construct new chip fabrication plants. Industry Minister Kim Jung-kwan said the two companies will each build two new fabrication sites in South Korea's southwest.
The southwestern region, centred on the city of Gwangju and South Jeolla province, will itself contribute between 5 trillion and 20 trillion won ($3.2 billion to $13 billion) to the projects. A further 81 trillion won ($52.5 billion) is earmarked for a chip-packaging cluster in the Chungcheong area near Seoul, according to the Al Jazeera report.
Packaging has become a quiet battleground in the AI chip race. The most advanced AI accelerators rely on tightly stacked memory and sophisticated packaging to shuttle data at extreme speeds, and South Korea's push signals an intent to own that layer of the stack as well as the memory itself.
A massive data-centre push
Beyond the fabs, the government unveiled plans for a network of AI data centres backed by some of the country's largest conglomerates. SK Group, GS Group and Naver will pour roughly 550 trillion won ($356 billion) into data-centre construction in the region.
Science Minister Bae Kyung-hoon announced an even more ambitious long-term target: by 2035, an additional 10-gigawatt AI data centre is slated for construction, bringing the total planned capacity to more than 18.4 gigawatts at an investment exceeding 1,000 trillion won ($648 billion).
Taken together, the commitments push the overall envelope of the strategy well past the $1 trillion mark, putting South Korea among the biggest national spenders on AI infrastructure anywhere in the world.
Why the urgency is acute
The scale reflects mounting anxiety in Seoul about being squeezed in a global AI arms race. South Korea's memory giants are the backbone of the world's high-bandwidth memory (HBM) supply, the specialised chips that sit alongside AI accelerators in data centres. Reuters recently reported that SK Hynix had joined the $1 trillion market-capitalisation club, joining Samsung and US-based Micron, as AI demand supercharges the memory sector.
High-bandwidth memory has become the connective tissue of the AI industry: without it, the graphics-processing units that train and run large models cannot move data fast enough to stay productive. Controlling that supply chain has therefore become a strategic priority, and South Korea's latest pledge is designed to lock in that advantage before rivals can erode it.
The boom is filtering through to the wider economy. Reports have surfaced that Apple has raised prices on MacBooks and iPads as AI-driven memory-chip costs surge, underlining how the scramble for AI silicon is rippling across consumer electronics worldwide.
A contested global landscape
But leadership is not guaranteed. TSMC-dominated Taiwan, the United States under its CHIPS Act framework, and an increasingly self-sufficient China are all moving aggressively on advanced manufacturing. CNN noted that the South Korean plan is explicitly designed to "cement global leadership" in AI chip production, a goal that will require not just capital but flawless execution against formidable rivals.
There is also a critical bottleneck the money alone cannot solve: energy. AI data centres are among the most power-hungry facilities ever built, and securing tens of gigawatts of reliable, ideally clean, electricity is one of the hardest problems in the industry. South Korea's plans will live or die partly on whether its grid and energy policy can keep pace with its silicon ambitions.
A political dimension, too
The announcement also carries a domestic political purpose. President Lee pledged that the package would help narrow regional disparities by reviving economies beyond the greater Seoul metropolitan area, channelling investment into the traditionally less-developed southwest.
Whether the optimism is fully warranted is an open question. Reuters reported that the sheer scale of the Samsung and SK Hynix commitments is itself a test of whether the AI investment cycle will deliver returns, and some analysts have cautioned that overbuilding could strain balance sheets if AI demand eventually cools.
For now, though, the message from Seoul is unequivocal: when it comes to the silicon underpinning the AI boom, South Korea intends to be at the front of the pack, and it is willing to bet more than a trillion dollars on it.
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