Seoul (AFP) – South Korea plans record investments of 21.3 trillion won (14.3 billion euros) for artificial intelligence and semiconductors in its budget for 2027, President Lee Jae Myung announced on Monday.

Published on: 02/11/2026 - 05:49

"We will allocate 21.3 trillion won to semiconductors, physical AI and AI data centers... almost double this year's amount," Lee said in a speech to Parliament.

He said the government would invest 4.7 trillion won (nearly 3.16 billion euros) to support "cutting-edge AI development projects, with the aim of achieving world-leading performance for our own AI model, a national strategic asset."

This proposal was made during a speech presenting his government's spending plans for 2027.

In total, the proposed budget amounts to 821 trillion won, an increase of 12.8 percent from the 2026 budget, making it the largest on record.

Lee Jae Myung must now obtain the adoption of the project by the deputies, which should be the case given the majority his party has in parliament.

Regarding the defense budget, the center-left South Korean president indicated that his government wanted an increase of 8.2% compared to this year, to reach 73.3 trillion won.

The government will focus on acquiring nuclear-powered submarines and KF-21 fighter jets, and “rapidly transforming our armed forces into an intelligent elite force by establishing integrated, manned and unmanned systems based on AI, robots and drones,” Lee Jae Myung also indicated.

Colossal plan

The South Korean government unveiled a colossal ten-year plan in June to build advanced semiconductor factories and data centers for artificial intelligence.

The total amount of this project, 1.8 trillion won, is the equivalent of two-thirds of the nominal gross domestic product (GDP) in 2025 of South Korea, the 13th largest economy in the world.

These projects aim to take advantage of the semiconductor "supercycle" by developing nationwide chip production hubs, creating robotics research and development centers, and building data centers dedicated to artificial intelligence.

Samsung and SK hynix also announced plans to invest more than 4.755 billion won (just under 3.18 billion euros) in South Korea, representing a record level of private investment in the country.

A project worth 800,000 billion won (455 billion euros) over an unspecified duration, will include four semiconductor factories, two of which will be built by the giant Samsung Electronics and the other two by its competitor SK hynix.

South Korea's two memory chip manufacturing giants have seen their profits and stock prices soar in recent months as rampant demand for AI infrastructure reduces the global supply of memory chips.

In September, Seoul announced its intention to create a “Future Fund” next year worth 162.3 trillion won, intended to channel record tax revenues generated by the growth of these flagships.

“By focusing additional tax revenue generated through people's efforts on the four pillars of youth, future growth engines, regions, and education and talent, we will reduce the deep disparities in our society while building a solid foundation for growth and development,” Mr. Lee explained on Monday.

He also said the government would invest 2.1 billion won in electricity, water infrastructure and industrial complexes.

hs/roc/tmt/vgu/roc

© 2026 AFP

The content you are trying to access does not exist or is no longer available.