Last year, the reported amount of foreign direct investment reached an all-time high. This is the effect of increased investment in advanced industries such as semiconductors and biopharmaceuticals, along with materials, parts, and equipment.
The Ministry of Trade, Industry and Energy noted on the 7th that last year's foreign direct investment report amounted to $34.57 billion, an increase of 5.7% compared to 2023 ($32.71 billion). The reported foreign direct investment has set a new record for four consecutive years since 2021. Minister Ahn Duk-geun said, “This shows that global investors still trust the fundamentals of the Korean economy despite difficult domestic and external conditions.”
By sector, the manufacturing industry led the overall performance increase, recording the largest amount of $14.49 billion. The electrical and electronic sector, which includes semiconductors and secondary batteries, recorded $5.26 billion, a 29.4% increase from the previous year. The machinery, equipment, and medical precision sectors saw a 174% increase, totaling $2.35 billion, while the pharmaceutical sector recorded a 113.2% increase at $710 million.
A Ministry official explained, “In particular, investments in advanced industries such as semiconductors (46.5%) and biopharmaceuticals (254.2%) have significantly increased,” adding that “the investment in materials, parts, and equipment also recorded an all-time high of $11.13 billion.” He noted that “the expansion of domestic advanced industry production capacity is expected to contribute to strengthening the supply chain.”
By country, investments from Japan significantly increased. Japanese investment rose approximately 375.6% year-on-year, reaching $6.12 billion. China also recorded a 266.1% increase, totaling $5.79 billion. In contrast, investment from the United States decreased by 14.6% to $5.24 billion, while Europe saw an 18.1% drop to $5.1 billion. The official stated, “The reverse base effect and political changes had an impact.”
In terms of type, greenfield investment for new and expanded factories led to the performance. Greenfield investment increased by 13.5% year-on-year, reaching an all-time high of $26.7 billion. Greenfield investment is expected to contribute to job creation and revitalization of the regional economy in the future. In contrast, mergers and acquisitions (M&A) investment fell by 14.5%, totaling $7.86 billion.
The government plans to make every effort this year to expand foreign investment attraction by enhancing communication with global investors, strengthening incentives for advanced industries, and creating an investment environment that meets global standards.