The government will conduct monthly reviews of three major mega projects to translate a $1.6 trillion local investment plan into actual investments. It is also moving to establish a resource security fund to manage supply chains for key minerals, crude oil, and gas.
On August 4, the Ministry of Trade, Industry and Energy presented ten key initiatives, including the three mega projects and a major shift towards manufacturing artificial intelligence (M.AX), during its second-half work report.
The ministry assessed that it effectively managed oil prices through a maximum price system for petroleum products in response to the Middle East conflict earlier this year. It also diversified crude oil and naphtha imports and implemented oil stock swaps to prevent disruptions in industrial production.
Despite challenging external conditions, including the Middle East conflict and U.S. tariffs, exports showed strong performance. With key items performing well and proactive trade responses, exports reached a record high of $496.3 billion in the first half of the year.
In the second half of the year, the ministry plans to implement the ten key initiatives to establish four growth axes and two spatial axes. It aims to accelerate the execution of the three mega projects, which will see investments of 896 trillion won in the Honam region, 392 trillion won in the Chungcheong region, and 312 trillion won in the Yeongnam region. Monthly review meetings chaired by the president will be held to monitor investment progress and address challenges, and the ministry will establish a semiconductor innovation growth support team. This approach will allow for simultaneous progress on related procedures, moving away from the traditional sequential method of handling permits, site development, and power and water supply.
For the Yongin semiconductor cluster, the completion date for the general industrial complex has been advanced from 2045 to 2033, and the national industrial complex from 2047 to 2039, shortening the timelines by 12 and 8 years, respectively. The national industrial complex aims to complete land compensation by the end of this year and plans to initiate operations of the first fab by 2029.
The Honam semiconductor cluster aims to begin construction and production within the government’s term, with plans to select a project implementer and designate candidate sites this year. Efforts to secure power and water supply and related permits will also proceed in parallel.
To strengthen the investment base in the region, the government will select three to four 'growth engines' in each region this month. These growth engines will receive support packages covering finance, taxation, systems, talent, technology, and infrastructure. The government plans to enact the mega special zone law by the end of the year, introducing around 300 regulatory exceptions and special subsidies.
Additionally, the establishment of a resource security fund is being pursued to enhance resource security. This fund will be utilized to reduce dependence on Middle Eastern oil and gas, expand storage facilities, and increase international joint stockpiling, as well as stockpiling essential petrochemical products.
The funding sources and scale of the fund are still under discussion among relevant ministries. Deputy Minister Moon Shin-hak explained in a pre-briefing that discussions are ongoing with the Ministry of Economy and Finance about utilizing part of the energy special account as funding for the resource security fund.
The number of key mineral stockpiling items will be expanded from the current 24 to 29, and the maximum stockpiling amount will increase from 180 days to 365 days. The government plans to diversify import routes using official development assistance (ODA) and policy finance, while also restructuring the Korea Mine Rehabilitation and Resource Corporation to focus on securing and stockpiling key minerals.
In the trade sector, the government will evaluate strategic and commercial aspects, as well as mutual benefits with the U.S., to select the first strategic investment project in the U.S. by the end of the year. It is also considering joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to diversify markets and strengthen supply chains.
Deputy Minister Moon stated, "As the multilateral trading system is collapsing and trade is facing difficulties, we see the need to pursue CPTPP membership. We are currently conducting in-depth discussions with relevant ministries, but no definitive decisions have been made within the government yet."
In the M.AX sector, the government plans to expand the number of AI factories to 220 by the end of this year. In 30 manufacturing sites, the experiences and knowledge of skilled workers will be digitized, and humanoids will be tested in ten sites, including steel and semiconductors. By 2030, seven key industrial complexes will be developed into M.AX clusters.
* This article has been translated by AI.
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