South Korea to double AI and semiconductor spending to 21.3 trillion won

Record investment in AI and chips

South Korea will allocate nearly $16 billion to artificial intelligence and semiconductors — President Lee Jae-myung announced this in his annual budget address to parliament, Deutsche Welle reports. According to him, 21.3 trillion won (€14.3 billion) will be invested in AI and the 'three megaprojects': semiconductors, physical AI, and AI data centers — almost double the amount for the current year. Separately, 4.7 trillion won will go to 'advanced AI projects', aimed at creating the country's own world-class AI model, which the president called a 'national strategic asset'.

Context: a record budget and an export record

The statement comes against the backdrop of a record budget proposal for 2027: government spending will rise by 12.8% to 820.9 trillion won (about $615.6 billion). The proposal requires parliamentary approval, where the president's party, the Democratic Party of Korea, currently holds a majority — meaning this remains a plan, not an adopted decision. The bet on chips rests on the structure of the economy: South Korea is Asia's fourth-largest economy and home to the two largest memory chip makers, Samsung Electronics and SK Hynix, while the AI boom has sharply boosted demand for memory. The effect is already visible in the statistics: GDP growth in the third quarter turned out faster than expected thanks to chip exports and investment, and exports from January to October reached $930 billion — by the end of the year the country could become the fourth after the US, China, and Germany to surpass the $1 trillion mark.