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technology research. For 6G networks and self-driving car technology, South Korea
invested 17.2 billion won (US$15.8 million) and 24.9 billion won (US$22.9 million),
respectively. South Korea supports projects in new technologies and digital technologies;
alleviates the burden of failed innovative startups by eliminating co-guarantee
requirements; provides incentives for researchers and university professors to start
innovative businesses; and invests in developing high-quality human resources in the
digital field.
The Green New Deal (GND) is a part of South Korea's post-Covid-19 economic
recovery strategy. The GND focuses on digital transformation, green growth, carbon
emission reduction and job creation through investment in clean energy, environmentally
friendly infrastructure and digital technology to revive the economy and lay the
foundation for long-term development. The government was investing 73.4 trillion won
(equivalent to 3.8% of GDP) to implement the GND strategy by 2025.
The semiconductor (chip) industry is one of South Korea's core industries,
accounting for 8% GDP. According to the Ministry of Trade, Industry and Energy (MTIE),
semiconductors are the largest export items, reaching approximately US$129 billion,
representing 18.9% of South Korea's total exports in 2022. Thanks to strong demand for
chips for new IT devices and emerging services such as artificial intelligence (AI) and cloud
computing, global demand for chips has increased, leading to robust growth in the
semiconductor industry in the post-Covid 19 years.
In 2027, approximately 65 trillion won will be spent on the use of artificial
intelligence (AI). The South Korean government has introduced tax incentives and policies
to further encourage investment in the semiconductor industry, leading to a 33.9%
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increase in South Korean exports, reaching US$65.85 billion (as of January 2026) ) – the
strongest semiconductor export growth in the period (2021-2026).
The market for equipment, materials and services for the semiconductor
manufacturing industry in South Korea is enormous. In 2022, South Korean companies
purchased semiconductor equipment worth US$22 billion, accounting for 20% of the global
semiconductor equipment market. Most of these equipment are supplied by foreign
semiconductor manufacturers primarily from the United States, Japan and the Netherlands.
The government has included cloud computing as one of the sub-areas of its national
digitalization strategy aiming to promote high-speed, energy-efficient cloud infrastructure
and transform the software market into a Software as a Service (SaaS) model.
In 2023, South Korea announced the High-Tech Industry Development Initiative and
called for 550 trillion won in government investment, equivalent to US$422 billion into six
leading technology sectors, including semiconductors. The remaining five (5) sectors are
flat-panel displays, batteries, biopharmaceuticals, future cars and robotics. The High-Tech
Industry Development Initiative sets out South Korea's ambitious goal of building the
world's largest semiconductor manufacturing cluster in the next two decades (2025-2045).
The development of South Korea's digital economy is closely linked to the demand
for new digital skills and the need for a workforce capable of adapting to new
technologies. South Korea is implementing the Digital New Deal to promote artificial
intelligence (AI), big data and digital infrastructure, leading to a significant demand for
data analytics, cybersecurity and cloud computing. South Korea ranks 6th globally in
digital competitiveness thanks to its strong investment in digital education and skills

3 Source: Ministry of Trade, Industry & Energy (MOTIE); https://tradingeconomics.com/
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