South Korea’s two largest conglomerates, Samsung Group and Hyundai Motor Group, have unveiled record-setting domestic investment plans in response to rising concerns that the country’s massive $350 billion strategic commitment to the United States could trigger a “hollowing out” of local industries. President Lee Jae Myung had warned that the heavy U.S.-focused investment especially the $200 billion cash component risked weakening domestic growth unless major corporations stepped in to reinforce the national economy.
Samsung’s 450 Trillion Won Investment Plan (~$310.79 Billion)
Samsung has committed a staggering 450 trillion won over the next five years, marking one of the largest corporate investments ever announced in South Korea.
Pyeongtaek P5 Chip Plant
A major portion of this investment centers on the expansion of Samsung’s world-class semiconductor operations.
- Flagship Project: The Pyeongtaek P5 line, part of the world’s largest chip complex.
- Purpose: Boost production of memory chips for traditional servers and rapidly scaling AI infrastructure.
- Reason: The global AI boom has sparked unprecedented demand for high-performance memory, tightening supply and increasing prices.
- Timeline: Mass production scheduled for 2028, after delays in 2023 caused by weak demand for smartphone and PC chips.
Other Key Areas of Investment
Samsung’s multitrillion-won plan will also support:
- AI data centers through Samsung SDS
- Next-generation batteries via Samsung SDI
- OLED production advancements at Samsung Display
The company aims to create 60,000 new jobs, reinforcing its long-term commitment to South Korea’s tech leadership.
Hyundai Motor Group’s 125.2 Trillion Won Plan (~$86 Billion)
Hyundai announced its largest-ever domestic investment, totaling 125.2 trillion won from 2026 to 2030- 40% higher than the previous five-year cycle.
Investment Breakdown
- 50.5 trillion won for Future Businesses: AI, robotics, Software-Defined Vehicles (SDVs), and hydrogen technologies.
- 38.5 trillion won for R&D: Focused on next-gen mobility innovation.
- 36.2 trillion won for Production Facilities: Enhancing domestic EV manufacturing and modernizing production lines.
Hyundai aims to position South Korea as a global mobility innovation hub, while boosting export competitiveness.
The U.S. Trade Deal Driving the Pressure
The investment announcements follow South Korea’s commitment of $350 billion to U.S. strategic sectors, including:
- $150 billion for shipbuilding, workforce development, and shipyard upgrades
- $200 billion for energy, semiconductors, pharmaceuticals, AI, critical minerals, and quantum computing
In Exchange, the U.S. Offered Tariff Concessions
- Reduction of Section 232 tariffs from 25% to 15% for Korean autos, parts, timber, and related goods
- Removal of the 50,000-unit cap on U.S.-originating vehicles entering Korea without modification
These concessions significantly benefit Korean exporters but raised fears of domestic underinvestment.
President Lee urged Korean conglomerates to prioritize domestic growth to prevent an investment vacuum at home. Samsung and Hyundai’s historic pledges are a direct response designed to balance global strategy with national economic stability.
Together, these investments reaffirm South Korea’s determination to remain a powerhouse in semiconductors, AI, electric vehicles, robotics, and next-generation manufacturing, even as it deepens economic ties with the United States.
