South Korean President to unveil massive AI and chip inve…

South Korean President Lee Jae Myung is set to announce three significant "mega-projects" aimed at developing a new semiconductor hub in the southwestern region. Investments could exceed $650 billion, attracting major companies like Samsung and SK, and aligning with Lee's goal of reducing regional disparities. The government plans to support this initiative with infrastructure, workforce training, and resources. Critics express concern over political motives and the feasibility of rapid development in a new area, especially regarding the demands of advanced semiconductor production.

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Summary
Companies
Investments could exceed $650 billion, media say
Expected southwest chip hub plan aims to ease Seoul-area concentration
Lee denies regional favouritism, called project national survival strategy
Critics question infrastructure, skilled labour and political motives behind the plan

SEOUL, June 29 (Reuters) - South Korea is set to unveil three "mega-projects" to fuel its next growth phase, including a new semiconductor hub in the ‌southwest that local media say could attract investments by Samsung and SK spanning hundreds of billions of dollars over several years.

The announcement would mark President Lee Jae Myung's boldest push yet to align South Korea's AI and chip ambitions with his pledge to narrow regional disparities and revive economies beyond the Seoul metropolitan area.

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Lee will preside over the event, framed as a national "great leap" due to be unveiled around 0500 GMT, his office said, with ministries covering industry, science, climate and transport ⁠set to outline policy support.

Samsung Electronics (005930.KS), opens new tab and SK are expected to present investment plans, and their chairmen, Jay Y. Lee and Chey Tae-won, are among business leaders tipped to attend by local media.

Representatives of other firms including LG Electronics, HD Hyundai Robotics, Korea Electric Power Corp and Korea Water Resources Corp are also attending, Lee's office said.

The package will span semiconductors, AI data centres and physical AI including robotics, Lee's office said, while the president's social media posts signalled a new chip cluster planned for the underdeveloped southwest, including Gwangju and South Jeolla province.

Local media have reported the planned investments could exceed 1,000 trillion won ($651.41 billion) over coming years.

Besides Samsung Electronics, South Korea is also home to SK Hynix (000660.KS), opens new tab, the world's two largest memory chipmakers, whose high-bandwidth memory (HBM) chips are pivotal ‌in the ⁠global race to build advanced AI systems. Both companies already operate major semiconductor facilities in and around the Seoul metropolitan area.

The government is also set to detail extensive support measures covering power, water, land, infrastructure, workforce training and housing.

Lee has defended the proposed southwest chip hub in a series of X posts over the weekend, rejecting criticism that it favours a liberal stronghold. He framed it instead as a "national survival strategy" to ⁠ease regional imbalances and expand capacity for the AI era.

"The creation of a semiconductor industrial ecosystem in (the southwest) is not a special favour for a particular region," Lee wrote in one post.

"It is the additional creation of the most rational semiconductor industrial centre through the decisions of relevant companies ⁠under full government support."

Industry experts say diversifying chip investment beyond Seoul could ease infrastructure bottlenecks, but warn that building cutting-edge fabs requires vast electricity and water, advanced logistics, deep supplier networks and highly skilled labour - elements that may not scale quickly enough in ⁠a new region to meet surging AI demand.

Opposition politicians have sharply criticised the plan, questioning whether the proposal is politically motivated given that 85% of voters in the region backed Lee in last year's presidential election.

The announcement comes as Lee's approval rating has slid for six weeks to 46.5%, according to pollster Realmeter.

($1 = 1,535.1300 won)

Reporting by Joyce Lee Editing by Shri Navaratnam

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