Next-generation semiconductor, materials innovation hub planned; advanced robot super-innovation belt to be established

Koo Yun-cheol vows to swiftly announce '5-pole, 3-special' growth engine

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol announces government support measures at a national briefing on the Yeongnam region's advanced industry development vision, held Thursday in Jinju, South Gyeongsang Province, under the chairmanship of President Lee Jae Myung. [Yonhap]
Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol announces government support measures at a national briefing on the Yeongnam region's advanced industry development vision, held Thursday in Jinju, South Gyeongsang Province, under the chairmanship of President Lee Jae Myung. [Yonhap]

The government is reviewing tax support measures — including designating small modular reactors as a national strategic technology — to back large-scale corporate investment in the Yeongnam region as part of three major mega-projects.

The plan aims to develop the Yeongnam region into an innovation hub for next-generation semiconductors and materials, parts and equipment, while concentrating support on semiconductor development to power gigawatt-scale AI data centers.

The government unveiled the Yeongnam advanced industry development plan Thursday at a national briefing held at Gyeongsang National University in Jinju, South Gyeongsang Province.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol said the real competitive battleground in today's winner-takes-all global order lies not in the already saturated Greater Seoul area but in the regions. "We will flesh out the vision and policy direction for a sweeping spatial transformation centered on the regions, and swiftly announce the '5-pole, 3-special' growth engine," he said.

To support large-scale corporate investment, the government plans to introduce a domestic production tax credit and review designating small modular reactors as a national strategic technology, strengthening overall tax support.

The government also plans to expand fiscal support for large-scale facility and R&D investment, including new subsidies tied to the 5-pole, 3-special growth engine and dedicated R&D programs for three core robot components such as actuators.

A Southeast Investment Corporation will be established to provide close financial investment support, and new advanced national industrial complexes will be developed in the Yeongnam region. Regulations will also be streamlined through the designation of a Yeongnam mega special zone.

At the broadest level, the government will pursue three mega-projects — semiconductors, AI data centers and physical AI — as engines of a great leap forward for South Korea, centered on regional areas including Yeongnam.

For semiconductors, the government will expand a nationally distributed, region-specific production network: Greater Seoul as the production hub, the Chungcheong region as the packaging hub, and Yeongnam as the next-generation semiconductor and materials, parts and equipment innovation hub.

AI data center infrastructure will be built across the country, with 2 gigawatts allocated to the Yeongnam region alone. Ulsan is set to host the country's first gigawatt-scale mega data center.

For physical AI, the government will move quickly to advance "X+AI" — integrating AI across all industries including manufacturing, logistics and defense.

The robot industry will be intensively developed around an advanced robot super-innovation belt linking Gumi, Pohang, Daegu and Changwon.

Beyond semiconductors, AI data centers and physical AI, the government also plans to develop Yeongnam into a world-leading advanced manufacturing hub across a range of industries, including shipbuilding, automobiles, aerospace and defense, and energy.

In semiconductors, a power semiconductor cluster in Busan and a materials, parts and equipment and defense-specialized semiconductor testbed in Gumi will be built to establish the region as a next-generation semiconductor and materials innovation hub.

To support gigawatt-scale mega AI data centers in Ulsan and elsewhere, the government will concentrate support on developing high-performance, low-power semiconductors for data center servers.

With a goal of ranking among the top three globally in robotics and first in physical AI within five years, the government will push a physical AI transformation of Yeongnam's manufacturing sector. Plans include building a humanoid robot mass production line in Gumi and launching dedicated R&D programs for three core robot components including actuators and sensors. Investment in physical AI-based production lines in shipbuilding and automobiles will also be expanded.

To lead a green energy transition, the government will build the world's first dedicated small modular reactor production factory and invest in gas turbines and offshore wind power.

The aerospace and defense industry will be nurtured as a future growth driver for the Yeongnam region. The government plans to provide comprehensive support — including public demand creation, R&D and policy financing — to help domestic companies with proven capabilities in independent aircraft production, export competitiveness, and space experience and infrastructure grow into global anchor firms.


oskymoon@heraldcorp.com