BAF NEWS

Background: Trade Deal and Presidential Meeting

Here’s the twist: the investment wave landed right after a U.S., South Korea trade deal was finalized. And it followed a high‑profile meeting with President Lee Jae Myung, according to multiple reports.

The deal reduced U.S. auto tariffs on Korean vehicles to 15%, which matters for export math, Reuters reported. Meanwhile, Seoul also pledged additional U.S. investments as part of the package, according to available reports.

Samsung’s KRW 450 Trillion Investment Plan

Samsung dropped the biggest number: KRW 450 trillion over five years. Reuters said the plan includes a new chip production line in Pyeongtaek, with mass production at the P5 plant slated for 2028.

Moreover, Samsung SDS will build a large‑scale AI data center in South Jeolla Province, according to local coverage. And the group flagged broader AI infrastructure and R&D spending in Korea. That total equals about $309 billion, per Reuters.

Hyundai Motor Group’s Five-Year Commitment

Hyundai Motor Group committed KRW 125.2 trillion in Korea from 2026 to 2030. The company detailed KRW 50.5 trillion for AI and other future areas, KRW 38.5 trillion for R&D, and KRW 36.2 trillion for production facilities.

You might be surprised that the largest slice goes to future businesses. Crucially, Hyundai also plans support for local parts suppliers adjusting to tariff changes, Reuters noted. Consequently, the plan aims to keep the supply base competitive at home.

SK Group’s Strategic Domestic Investments

SK Group reiterated KRW 128 trillion of domestic investments through 2028. The focus spans AI, semiconductors, energy, and biotechnology.

Therefore, SK’s pledge dovetails with Korea’s push to anchor AI and chip capacity onshore. And it positions SK to compete in foundational infrastructure for next‑gen computing.

LG Group’s Focus on Materials and Supply Chain

LG reaffirmed KRW 100 trillion for 2024–2028. The emphasis is on critical materials, parts, and equipment for resilient supply chains.

In effect, LG is targeting the inputs that keep the entire tech stack moving. That is where bottlenecks often bite first.

Shipbuilders Join the Investment Wave

It is not just tech and autos. Shipbuilders Hanwha Ocean and HD Hyundai also unveiled plans to increase domestic investments, according to major outlets.

Consequently, the spending push now spans heavy industry as well. That widens the footprint beyond semiconductors and EVs.

Implications for South Korea’s Economy

What no one is mentioning: these bets build an end‑to‑end home base. Chips, AI data centers, materials, and shipyards point to a vertically integrated play.

If executed, the projects can lift domestic capex, jobs, and R&D intensity. Yet timelines matter, especially for Pyeongtaek P5, which targets 2028 mass production.

Additionally, the tariff shift changes incentives for export pricing and sourcing. Hyundai’s allocation suggests a measured response to that new math.

Meanwhile, AI data centers will pull massive power and advanced chips. That, in turn, could catalyze grid upgrades and local component demand.

Still, follow‑through will determine the payoff. Permitting, energy costs, and talent pipelines are the next hurdles.

Here’s the twist: the trade deal set the stage, but domestic ambition is doing the heavy lifting. For now, Korea Inc. is choosing to build at home.