corporate

South Korea plans to develop a new semiconductor production base in the country’s southwestern region through 800 trillion won (US$517.9 billion) in corporate investments that will create four memory chip fabrication plants, Industry Minister Kim Jung-kwan said Monday.

Kim unveiled the investment plan to transform the Gwangju and Jeolla regions into the nation’s second major semiconductor cluster, alongside the existing hub in the Seoul metropolitan area, during a national investment briefing chaired by President Lee Jae Myung at Cheong Wa Dae.

“Relying on a single production base in the Seoul metropolitan area is no longer sufficient to meet surging semiconductor demand,” Kim said, noting that constraints on power and water resources limit further expansion under existing plans.

The semiconductor investment is part of the government’s “three mega projects” initiative, which calls for large-scale investments by chip giants Samsung Electronics Co. and SK hynix Inc., as well as other companies, in semiconductors, physical artificial intelligence (AI) and AI data centers.

Kim said the Chungcheong region will be developed into an advanced semiconductor packaging hub through 81 trillion won in investment to meet growing packaging demand as chip production expands, while the Daegu and North Gyeongsang regions will be fostered as innovation hubs for semiconductor materials, components and equipment.

He added that the government will help companies accelerate semiconductor investment by bringing forward the construction schedule for new fabrication plants by as much as 12 years, from the mid-to-late 2040s to the mid-2030s.

To support the expansion, the government vowed to streamline permits and construction procedures while investing in critical infrastructure, including electricity and industrial water supplies.

At the meeting, attended by Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won, Kim outlined a government-industry plan to invest 30 trillion won over the next 15 years to support the entire semiconductor value chain, from research and development and chip design to testing and manufacturing.

The ambitious industrial blueprint is aimed at transforming the country from a global manufacturing powerhouse into a leader in the artificial intelligence era, anchoring its strategy on semiconductors, AI infrastructure and physical AI.

For the robotics sector, Kim said the government will foster an AI-powered robotics industry to strengthen South Korea’s manufacturing competitiveness in the intensifying global competition.

Kim warned that China has already begun mass-producing humanoid robots through regional manufacturing hubs, underscoring the need for South Korea to accelerate the commercialization and mass production of its own humanoid robots.

“We must accelerate the foundation for mass production,” Kim said, adding that the government plans to create early domestic demand by procuring humanoid robots for education, defense and disaster response.

The initiative aims to raise South Korea’s share of the global humanoid robot market from just 1 percent last year to 20 percent over the long term.

As the third pillar of the strategy, Minister of Science and ICT Bae Kyung-hoon outlined a plan to expand the nation’s AI data center infrastructure, emphasizing that ample data is important for South Korea to secure a leading position in the global physical AI race.

“The next three years will be the golden time to become No. 1 in the area of physical AI,” Bae said. “The government will lead the physical AI sector, by designating it as a national strategic industry.”

Under the plan, an initial investment of 550 trillion won will be spent to build 8.4 gigawatts (GW) of AI data centers by 2029. The ministry will gradually expand the infrastructure by 10 GW until 2035, Bae said.

To support the initiative, the government pledged to ensure adequate supplies of electricity and industrial water, and strengthen power infrastructure around existing semiconductor clusters.

Once the data infrastructure is in place, the science ministry plans to develop a general-purpose foundation model for physical AI in the next three years, based on a world model, or AI tools that understand the dynamics of the real world.

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April 17 (Asia Today) — Corporate loan delinquency rates in South Korea are rising three times faster than household debt, increasing pressure on banks as lending expands, financial data showed Thursday.

According to the Financial Supervisory Service, the delinquency rate on corporate loans at domestic banks reached 0.76% at the end of February, up 0.09 percentage points from a month earlier and 0.08 points from a year earlier.

By comparison, the household loan delinquency rate rose 0.03 percentage points from the previous month to 0.45%, highlighting a much steeper increase in corporate defaults.

The corporate delinquency rate marked its highest level in nine months. Small and medium-sized enterprises recorded a rate of 0.92%, with small corporations at 1.02% and sole proprietors at 0.78%, indicating rising stress across the sector.

Delinquency rates among large corporations also increased, reaching 0.19% – the highest level in 28 months – suggesting that financial strain is spreading beyond smaller firms.

The trend comes as banks expand corporate lending under policies aimed at boosting “productive financing.” Outstanding corporate loans at the country’s five major commercial banks totaled about 859.8 trillion won ($573 billion) as of the end of March, up roughly 15.0 trillion won ($10 billion) in three months.

Loans to small and medium-sized enterprises accounted for about 79% of the total, while large corporate loans made up about 21%.

Regulators said rising delinquencies are most pronounced among smaller firms but warned that broader economic uncertainty could push default risks higher across the corporate sector.

Banks are responding by tightening risk management while maintaining lending growth. Major lenders are strengthening oversight from initial loan screening to post-loan monitoring, using systems such as early warning tools and AI-based credit assessments to identify high-risk borrowers.

Industry officials said the combination of expanding corporate lending and rising delinquency rates is rapidly increasing the burden on banks to maintain asset quality.

— Reported by Asia Today; translated by UPI

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Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260417010005508