The South Korean government on July 13, at a cabinet meeting chaired by President Lee Jae-myung, had the Ministry of Economy and Finance unveil the “Economic Growth Strategy for the Second Half of 2026.” It announced an acceleration of the “super projects” in semiconductors, AI data centers, and physical AI. At the same time, it plans to launch a blockchain-based tokenization pilot for government bonds, in coordination with the Korean central bank’s institutional CBDC, to explore upgrades to financial infrastructure. In the semiconductor sector, it plans to invest 800 trillion won to build four semiconductor wafer fabs.
Semiconductor Three-Region Layout: Southwest 800 Trillion Won, Chungcheong 156 Trillion Won, and Yeongnam Innovation Center
According to the “Economic Growth Strategy for the Second Half of 2026,” South Korea’s regional investment plans for the semiconductor industry are as follows:
Capital Area (Yongin, Pyeongtaek): Existing wafer fabs will be completed ahead of schedule to ensure memory capacity doubles within five years
Southwest Region: Invest 800 trillion won to build four new semiconductor wafer fabs
Chungcheong Region: Invest 156 trillion won to build a packaging center (including the Yangsan and Cheonan HBM wafer fabs)
Yeongnam Region: Leverage existing industrial infrastructure to cultivate next-generation innovation centers for semiconductors, materials, components, and equipment
In addition, the government plans to increase R&D spending to ensure cutting-edge AI semiconductor technologies and will review establishing public-private partnership contract manufacturing facilities to support mass production of power semiconductors and demonstration applications.
Blockchain Tokenization Pilot for Government Bonds: Upgrading Financial Infrastructure Linked with the Korea Central Bank’s Institutional CBDC
According to reports, the South Korean government plans to advance, in the second half of this year, large-scale demonstration projects for blockchain and digital assets, and to launch a blockchain-based tokenization pilot for government bonds. The Bank of Korea (the South Korean central bank) plans to push forward government bond tokenization pilots linked to its institutional CBDC, to fully kick off innovation in financial infrastructure based on blockchain.
In addition, the government also plans to set up a strategic investment account and a National Growth Fund, focusing on providing long-term patient capital (equity investments) to support strategic industries such as AI, quantum technology, security, and blockchain, while actively seeking collaboration on investment with overseas sovereign wealth funds.
Frequently Asked Questions
What specific investments are included in South Korea’s five-year plan to double semiconductor capacity?
Based on the strategy document, the main investments include: investing 800 trillion won in the Southwest region to build four wafer fabs; investing 156 trillion won in the Chungcheong region to build a packaging center (including HBM wafer fabs); completing existing wafer fabs in the Capital Area ahead of schedule; cultivating 100,000 semiconductor professionals; and increasing R&D investment in AI semiconductors. The specific timeline and allocation of manufacturers will follow official announcements by the South Korean government.
How does South Korea’s government bond tokenization pilot plan work?
According to reports, the Bank of Korea plans to advance a tokenization pilot for government bonds and explore linkage with the institutional CBDC. This plan is positioned as “blockchain-based financial infrastructure innovation,” and the specific technical architecture and pilot schedule will follow official announcements by the Bank of Korea and the government.
What new plans does the strategy investment account of the Korea Investment Corporation (KIC) have?
Based on the strategy document, KIC will establish a strategic investment account and restructure and expand existing funds into an integrated sovereign wealth fund. Funding sources include government appropriations, donations, and operating profits (all profits will be used for reinvestment, dividends, or remitted to the national treasury). It will focus on investing in three major strategic industries and will actively seek co-investment with overseas sovereign wealth funds.
