The government will link three mega projects—semiconductors, AI data centers, and physical AI—to regional growth strategies. It plans to expand semiconductor production capacity in the greater Seoul area while creating specialized industrial hubs in regions such as Honam and Chungcheong, and to lay the groundwork for region-led growth through the five hubs and three special zones growth engine.
◇Early completion of fabs in the greater Seoul area… Honam, Chungcheong, Busan, Gumi, and Ulsan to serve as hubs
On the 14th, the government announced the second-half 2026 economic growth strategy and said it will "complete fabs in the greater Seoul area, including Yongin and Pyeongtaek, ahead of schedule to double memory production capacity within five years and invest 800 trillion won to build five SuNAM semiconductor fabs." Chungcheong will be fostered as a packaging hub through HBM fab construction, and Busan will be developed into a power semiconductor production hub. In Gumi, it will focus support on building demonstration infrastructure such as testbeds and testing and evaluation centers to establish a production base for semiconductor materials and parts.
R&D support will also be increased to secure breakthrough technologies, such as developing Neural Processing Unit (NPU) chips tailored to AI demand in fields including future mobility, robotics, and defense. The government plans to accelerate training 100,000 semiconductor workers by expanding semiconductor-specialized universities and a semiconductor academy.
It also decided to invest 550 trillion won to build 8.4GW (gigawatt)-class AI data centers. Groundbreaking is targeted for the first half of 2028, with phased operations in 2029. Regional cooperation with corporations in Ulsan (SK), Donghae (GS), and Sejong (Naver) will proceed. Next year, it will pursue designating AI data centers as a national strategic industry by supporting the domestic development of technologies in IT, cloud/software, and electricity.
In physical AI, it will identify industrial site demand in manufacturing, care, and agriculture, and move to demonstrate and spread core technologies. It will also develop AI robots specialized for 10 industries, including displays and shipbuilding and chemicals, with commercialization targeted for 2028, and support AI transformation (AX) on factory floors by deploying 1,000 units in the field. It will fund dedicated R&D for three vulnerable robot components (actuators, robot hands, and sensors) and develop a Korea-style foundation model.
◇Selecting the five hubs and three special zones growth engine to provide special subsidies, the Public Growth Fund, and regulatory exemptions
By the third quarter, the government will select growth engines for each region by considering regional industrial conditions, corporations' investment plans, future growth potential, and linkage with national industrial policy, and will support seven packages: fiscal, financial, tax, regulatory, technology, talent, and infrastructure.
It will introduce special growth engine subsidies proportional to investment size and concentrate more than 40% of the Public Growth Fund in non-capital regions. It will also support investment by corporations in growth engine sectors by utilizing opportunity development zones and will prepare tax incentives favoring non-capital regions. In addition, it will enact the Special Act on Mega Zones within the year and newly designate two wide-area regulatory free zones linking two or more local governments in Aug. to support commercialization and R&D funding.
It will also strengthen regional startup ecosystems. It will begin package support for four startup cities—Daejeon, Gwangju, Daegu, and Ulsan—and add six more in the second half. A regional growth fund to support regional startup companies will be created at a scale of 2 trillion won by 2030.
In addition, the second plan for public institution transfer will be announced in the second half, and transfers will begin next year with leading institutions. Institutions that remain will be kept to a minimum, and transfers will be linked to the five hubs and three special zones growth strategy.