By Heejin Kim, Joyce Lee and Hyunjoo Jin
SEOUL, June 26 (Reuters) – Samsung Group will unveil a sweeping decade-long investment plan on Monday, pledging 1,000 trillion won ($648 billion) to anchor South Korea’s next growth cycle, including a possible 300 trillion won push to build chip factories in the country’s southwest, a media report said.
The investment, which would include AI data centers, batteries and displays, will be announced at a meeting with President Lee Jae Myung at the presidential office, the Maeil Business Newspaper said on Friday, without citing sources.
The initiative aims to turn South Korea’s AI boom into a nationwide growth engine by easing infrastructure bottlenecks and jumpstarting jobs and advanced manufacturing beyond the capital, but it is also fuelling debate over how the windfall should be shared as Samsung Electronics and SK Hynix reap record profits.
Top executives from heavyweights including Samsung Electronics and SK Hynix will attend the meeting and lay out investment plans targeting regions beyond Seoul, the report said.
The report did not say when the investment would be made. Other local media have reported similar plans without specifying investment amounts.
The concentration of the chipmakers’ production facilities in areas around Seoul has long drawn political pressure, and has been amplified by Lee’s push for balanced regional development.
Opposition lawmakers say the plan is politically driven, accusing the government of pressuring companies to invest in its southwestern stronghold ahead of the ruling party’s leadership contest.
Lee had separate meetings with the heads of Samsung and SK this week, media reports said.
The presidential office said it will unveil “three mega-projects” on Monday to drive a national leap forward, with policy adviser Kim Yong-beom adding that the plans – spanning semiconductors, AI data centres and robotics – will be outlined jointly by government and industry, with significant investment expected but no details disclosed.
Samsung and SK Hynix declined to comment.
INVESTING BEYOND SEOUL
Samsung Group is South Korea’s biggest conglomerate, with chip giant Samsung Electronics as its crown jewel, but also other affiliates such as battery maker Samsung SDI and IT services company Samsung SDS.
Kim has said that SK Hynix and Samsung may need to accelerate projects originally slated for the 2040s into the mid-2030s because AI-driven memory demand was growing faster than expected, leaving no room, power or water in the capital region for subsequent expansion.
He warned that further concentration around Seoul risks inflating property prices and widening inequality.
However, some experts question whether a southwest chip hub can overcome talent and infrastructure shortfalls critical to advanced manufacturing.
Securing skilled workers will be extremely difficult in the southwest, “and that will determine whether the project succeeds or fails,” said Kim Tae-yun, a professor of administration at Hanyang University.
“Unless a truly cutting-edge fab is built, the local economic impact will be limited — it risks becoming little more than a construction project and a real estate boost.”
REGIONAL DEVELOPMENT
The regional politics surrounding semiconductor investment became a flashpoint ahead of South Korea’s June 3 local elections, and debate over where the next wave of funding should go has intensified as Lee’s government has made AI a core economic policy priority.
Lee’s approval rating has fallen to 51%, the lowest since his inauguration in June last year, Gallup Korea said on Friday.
Candidates across multiple regions aggressively pitched their areas as the next semiconductor hub, promising to lure giants such as Samsung and SK Hynix. Proposals ranged from a 500 trillion won chip complex in the southwest to expanded clusters in some regions, according to local media, underscoring a nationwide contest for strategic tech investment.
The debate has also stirred concern in existing chipmaking cities such as Icheon, where SK Hynix operates major plants and local finances are heavily tied to the company.
“Most of the city’s tax revenue comes from SK’s chip plant, and our welfare depends on it,” said Jo Jun-taek, head of a grassroots group in Icheon.
“If a new cluster is created, we think SK will likely cut output here and. eventually close the plant. That would cause an outflow of people — the city would become a ghost town.”
Lee has promoted a plan to establish “five regional hubs and three special self-governing provinces” to counterbalance the dominance of the Seoul area, which accounted for 52.8% of South Korea’s gross regional domestic product in 2024.
The disparity is particularly evident in Gwangju – a key southwestern city with one of the country’s smaller regional economies and below-average per-capita output, according to official data.
Local media have reported that Samsung Electronics is considering Gwangju as a potential investment site. The broader southwest region, including Gwangju and the Jeolla provinces, is also a traditional stronghold of Lee’s Democratic Party.
Lee won 49.42% of the national vote in the June 2025 presidential election, but secured about 85% in Gwangju and South Jeolla, election data showed.
The main opposition People Power Party has accused the administration of politicising semiconductor investment.
“Where semiconductor factories are built should be decided by companies, not by the president,” PPP spokesperson Park Sung-hoon said this week.
($1 = 1,544.3200 won)
(Reporting by Heejin Kim, Hyunjoo Jin, Joyce Lee, Kyu-seok Shim and Hyeyoon ChoEditing by Ed Davies and Shri Navaratnam)
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