Chips, EVs Push South Korea’s $83 Bn Manufacturing Plan
- ByStartupStory | December 1, 2025
10 Key Sectors Target 119 Trillion Won Investment Amid AI And Trade Pressures
South Korea’s industry ministry has outlined a 119 trillion won ($83 billion) investment plan for 2025 across 10 strategic manufacturing sectors, led by semiconductors and electric vehicles (EVs), marking a 4% increase from 2024 commitments. Semiconductors spearhead with heavy focus on advanced memory amid AI-driven demand, while automobiles prioritize EV transition to counter global competition and secure supply chains. The blueprint addresses trade uncertainties from U.S. tariff threats while fostering domestic job creation and technological sovereignty.
Semiconductor Dominance Fuels Record Capex
Semiconductors anchor the push, with companies like Samsung Electronics 3.00% and SK Hynix ramping investments in high-bandwidth memory (HBM) and next-gen nodes responding to explosive AI chip needs. This aligns with South Korea’s K-CHIPS Act and mega-cluster plans in Gyeonggi Province, targeting 16 new fabs by 2047 at $471 billion scale. Display panels follow, bolstering OLED and mini-LED production for smartphones and TVs.
Rechargeable batteries face tempered spending due to oversupply, yet remain critical for EV dominance through LG Energy Solution and Samsung SDI expansions. Steel investments dip amid weak demand, shifting emphasis to high-value alloys for batteries and chips.
EV And Auto Sector Bets On Electrification
The automotive sector commits major funds to EV platforms, solidifying Hyundai Motor 2.68% and Kia Corporation 1.75%‘s global leadership with Ioniq and EV6 lines. Investments target battery tech, software-defined vehicles, and overseas plants amid U.S. policy risks like 25% steel tariffs and potential auto duties. Shipbuilding rebounds with LNG carriers and green vessels, while petrochemicals advance bio-based materials.
Machinery/robotics and textiles round out priorities, emphasizing automation for factories and smart fabrics integrating sensors.
Strategic Response To Global Headwinds
Industry Minister Ahn Duk-geun stressed balancing overseas expansion—critical amid U.S. President Donald Trump’s reciprocal tariffs—with domestic priorities to resolve supply chain vulnerabilities and generate jobs. Semiconductors and EVs, comprising 40%+ of exports, face heightened scrutiny as Trump eyes duties on chips, vehicles, and pharma starting March 2026.
South Korea pledged $350 billion in U.S. investments earlier, securing lower rates, but now doubles down internally. AI integration spans sectors: chips power data centers, EVs embed Level 4 autonomy, and robotics deploy collaborative arms.
Economic Targets And Implementation
The plan safeguards 4 million manufacturing jobs while aiming for 3% GDP growth via high-tech exports hitting $900 billion. Detailed breakdowns remain confidential to protect trade secrets, but ministry oversight ensures alignment with national strategies.
Challenges include U.S.-China tensions squeezing intermediates, battery glut pressuring margins, and steel overcapacity. Upside lies in AI tailwinds—HBM demand up 200%—and EV subsidies via Inflation Reduction Act equivalents.
This $83 billion blueprint positions South Korea to navigate geoeconomics, leveraging chips and EVs as twin engines for resilient growth through 2030.
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