Lee Jae-myung unveils $880 billion plan to turn South Korea's southwest into a chip hub

South Korean President Lee Jae-myung has unveiled an $880 billion plan to turn the country's less developed southwest into a global center for chip production, Bloomberg reports.

What the president is betting on

South Korea already ranks among the biggest beneficiaries of the global artificial intelligence boom. Local companies Samsung Electronics and SK Hynix are the world's largest makers of HBM (high-bandwidth memory) chips, which go into AI accelerators alongside Nvidia GPUs. Demand for this memory has surged along with the race for compute to train and run large language models.

• Size of the announced plan: $880 billion
• Goal: turn the country's southwest into a global chip hub
• Initiative led by: President Lee Jae-myung, who took office in June 2025 after a snap election
• South Korea already holds a leading position in producing HBM memory chips for AI accelerators (Samsung Electronics, SK Hynix)

Why the southwest, and what the president's legacy has to do with it

Bloomberg notes that Lee Jae-myung is tying his political legacy specifically to this plan, treating the transformation of a less developed region into an industrial chip cluster as one of the signature projects of his presidency. For South Korea, it continues a strategy already underway: the country has spent years investing in semiconductor megaclusters to stay ahead of competitors such as Taiwan and the US, which are also subsidizing construction of their own fabs.

Betting on a less developed region also carries political weight: it brings high-tech jobs to areas where industry has traditionally been weaker than in the capital region around Seoul.

How this fits into the global race for AI chips

Lee Jae-myung's plan arrives as the world's largest economies compete for control of the AI chip supply chain. The US subsidizes fab construction through its own semiconductor support programs, Taiwan defends its status as the world's largest contract chipmaker through TSMC, and China is ramping up investment in 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 have traditionally led and one that directly determines how fast the AI accelerators of the world's leading developers run.

Growing demand for this memory from companies training large language models has already noticeably reshaped the economics of South Korea's semiconductor industry. The government aims to convert this boom into long-term industrial infrastructure, not just one-off profits for manufacturers.

For Lee Jae-myung himself, the project also serves a narrower political purpose. It lets him show voters concrete, measurable results from his presidency: new plants, jobs, and a new status for a region that was previously seen as the country's economic periphery rather than part of the global supply chain for technologies that will shape the development of artificial intelligence for years to come.

What it means

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