South Korea is about to place what might be the largest single-country bet on AI infrastructure the world has ever seen. President Lee Jae-myung is set to announce three major national projects on June 29 targeting semiconductors, AI data centers, and physical AI, including robotics, in a move designed to convert surging global chip demand into domestic economic growth.

The centerpiece: Samsung Group is expected to unveil a 10-year investment plan that could reach 1,000 trillion won, roughly $648 billion. Of that total, 300 trillion won could be earmarked specifically for new semiconductor manufacturing facilities in South Korea’s southwestern region.

What’s actually in the package

The initiative spans three distinct but interconnected pillars. First, a semiconductor hub buildout focused on expanding fabrication capacity. Second, a push to construct AI data center infrastructure capable of handling the compute demands that come with training and deploying large-scale models. Third, investment in physical AI, a category that encompasses robotics and other hardware-software hybrid systems.

Samsung isn’t going it alone. SK Hynix, the world’s dominant maker of high-bandwidth memory chips essential for AI workloads, is also expected to participate actively. Top executives from both companies will reportedly join President Lee at the announcement event.

The regional redistribution angle

One of the more interesting wrinkles is where the money is going. Rather than concentrating investment in the Seoul metropolitan area or existing tech corridors, the plan deliberately targets underdeveloped regions. Gwangju and South Jeolla province are singled out as primary beneficiaries for new semiconductor facilities.

This initiative also builds on prior governmental efforts. In 2024, South Korea announced a 9.4 trillion won plan, approximately $7 billion, to support AI development through 2027. The new package dwarfs that commitment by orders of magnitude.

What this means for investors

The investment implications here operate on multiple levels. At the most direct level, Samsung and SK Hynix shareholders are looking at a massive long-term capital expenditure commitment. In the near term, heavy capex spending compresses margins and free cash flow.

For the broader semiconductor supply chain, South Korea’s move intensifies an already fierce global competition. The US has its CHIPS Act. Japan has been courting TSMC with subsidies. The EU has its own semiconductor ambitions. South Korea is essentially saying it refuses to cede ground in advanced chip manufacturing, particularly in the HBM segment where SK Hynix currently holds a commanding market position.