South Korea has announced USD 3.52 billion targeting semiconductor materials, parts, equipment, and fabless companies, as the government moves to fast-track an ambitious nationwide chip manufacturing expansion backed by the country's largest technology conglomerates.

Presidential Chief of Staff Kang Hoon-sik revealed the measures at a press briefing following a meeting chaired by President Lee Jae-myung on Monday, August 10. The gathering was also attended by senior executives from Samsung Electronics and SK.

Fund Details and Supporting Finance

The newly announced semiconductor fund will focus specifically on promising materials, parts, and equipment firms as well as fabless companies, Kang said. Alongside the fund, the government will provide an additional USD 3.5 billion in trade finance for suppliers, bringing the combined financial support to USD 7 billion.

The government will also launch a separate USD 705 million programme running over ten years to support cooperation between large companies and smaller suppliers across semiconductor development, testing and production. The measures sit within President Lee's semiconductor megaproject initiative, which was first unveiled in June of this year.

Under that broader initiative, Samsung Electronics and SK Hynix, together with suppliers and local governments, are expected to invest more than US$576 billion in new chip manufacturing projects. The investment plan includes major fabrication facilities planned for the country's southwest region.

Regulatory and Legislative Moves

To remove bureaucratic obstacles standing in the way of rapid development, the government will seek passage of a Mega Special Zone Act in Parliament before the end of the year. Kang said the legislation is intended to speed up permits, environmental reviews, and infrastructure construction at designated semiconductor zones across the country.

The Lee administration has framed the legislative push as essential to keeping pace with the timelines demanded by the scale of investment involved. Kang also confirmed that the government would work to ensure power and water supplies are made available on schedule to support the new semiconductor projects.

Gwangju Military Base Relocation

One of the more logistically complex elements of the plan involves a military air base in Gwangju. In his opening remarks before Monday's meeting, President Lee urged the Defence Ministry to relocate the functions of the air base by mid-2028 in order to accelerate the development of a semiconductor manufacturing complex planned for that site.

The government has designated the 8.3 million-square-metre area as a candidate national industrial complex. Authorities plan to complete the relocation and temporary dispersal of military facilities by the second half of 2028, clearing the way for industrial construction to proceed.

Water and Power Infrastructure Commitments

Kang outlined specific infrastructure targets tied to the two primary chip cluster locations being developed under the megaproject plan.

For the planned chip cluster in the southwestern Gwangju-South Jeolla region, authorities intend to secure 650,000 metric tons of water daily by 2030. That supply will be drawn from a combination of recycled wastewater and water sourced from nearby dams.

For the Yongin semiconductor cluster, which sits south of Seoul and represents South Korea's flagship chip manufacturing project, the government plans to supply 14.7 gigawatts of electricity by 2041. That power will come from a mix of cogeneration facilities, liquefied natural gas generation and electricity drawn from other regions of the country.

Broader Regional Investment Pipeline

Beyond the headline projects, Kang said megaprojects worth more than USD 246.8 billion in other regions of the country are scheduled to begin construction or facility expansions this year. A further USD 40.2 billion in research and development projects is also due to start during the same period.

The scale of the regional investment pipeline underscores the extent to which the Lee administration has made expanding semiconductor production capacity a central pillar of its industrial strategy.

The government has argued explicitly that existing production bases around Yongin and Pyeongtaek will not be sufficient to meet future demand driven by artificial intelligence, providing the strategic rationale for the push into new geographic locations, including the southwestern region.

Samsung Electronics and SK Hynix, South Korea's two dominant players in global chip manufacturing, are central to the execution of the megaproject plan, with their participation expected to anchor private investment across the multiple new clusters being developed simultaneously around the country.

South Korea's Semiconductor Expansion Is Moving Fast. Is Your Intelligence Keeping Up?

Every quarter, billions in semiconductor investment are committed across South Korea, with new fab announcements, government-backed incentive programs, and supply chain realignments reshaping the competitive landscape at a pace that leaves little room for outdated information or missed signals.

For firms operating in chip design, equipment supply, materials, or advanced packaging, the difference between winning a position in the next major project cycle and sitting it out often comes down to how early and how accurately you can track where capital is flowing.

The Global Project Tracking (GPT) platform by Blackridge Research is built precisely for that purpose, delivering structured, continuously updated intelligence across the full semiconductor project lifecycle in South Korea and beyond.

From emerging wafer fab clusters to leading-edge logic and memory expansions in South Korea, the GPT platform gives your team a single, reliable source to monitor market activity and align your business development efforts with real project momentum.

• Upcoming Projects

• Tender Notices

• Contract Awards

• Projects Under Construction

• Completed Projects

See how the Global Project Tracking (GPT) platform by Blackridge Research can sharpen your South Korean semiconductor strategy. Book a Free Demo with our team today.