Lee Jae-myung Announces $880 Billion Plan to Turn Southwest Korea into Chip Hub

President of the Republic of Korea Lee Jae-myung announced an $880 billion plan aimed at transforming the less developed southwest of the country into a global semiconductor manufacturing hub, according to Bloomberg.

What the president's bet is built on

South Korea is already among the major beneficiaries of the global artificial intelligence boom: local Samsung Electronics and SK Hynix are the world's largest manufacturers of HBM (high-bandwidth memory) chips, which are installed in AI accelerators alongside Nvidia's graphics processors. Demand for such memory has surged along with the race for computing power to train and operate large language models.

• The announced plan amounts to $880 billion
• The goal is to transform the southwest of the country into a global chip hub
• The author of the initiative is President Lee Jae-myung, who took office in June 2025 following extraordinary elections
• South Korea already holds leading positions in the production of HBM chips for AI accelerators (Samsung Electronics, SK Hynix)

Why the southwest and what does it have to do with the president's legacy

Bloomberg notes that Lee Jae-myung links his political legacy precisely to this plan — that is, he views transforming a less developed region into an industrial chip cluster as one of the main projects of his presidency. For South Korea, this is a continuation of a strategy already underway: the country has been investing for years in mega-clusters for semiconductor production to maintain its lead ahead of competitors like Taiwan and the USA, which also subsidize construction of their own fabs.

The bet on a less developed region also carries political significance — creating high-tech jobs in a region where industry has traditionally been weaker than in the Seoul metropolitan area.

How this fits into the global race for AI chips

Lee Jae-myung's plan appears as the world's largest economies compete for control over the supply chain for artificial intelligence chips. The USA subsidizes fab construction through its own semiconductor industry support programs, Taiwan protects the status of the world's largest contract chip manufacturer through TSMC, and China is increasing investments in creating an industry independent of Western technology. In this race, South Korea is betting specifically on HBM memory — a segment where Samsung Electronics and SK Hynix traditionally hold leading positions and directly determines the speed of AI accelerators for the world's leading AI developers.

The growing demand for such memory from companies training large language models has already noticeably changed the economics of South Korea's semiconductor industry — and the government is counting on converting this boom into long-term industrial infrastructure, rather than just one-time profits for manufacturers.

For Lee Jae-myung himself, the project has an even narrower political meaning: it allows him to present voters with a concrete, measurable result of his presidency — new factories, jobs, and the status of a region that was previously perceived as an economic periphery of the country, rather than as part of the global supply chain of technologies that determine the development of artificial intelligence for years to come.

What this means

South Korea is using global demand for AI infrastructure not just as a source of export revenue, but as a tool for regional economic policy — turning the chip boom into a way to level development within the country.