South Korean firms, including Samsung, lift home investment after tariff deal

Samsung Electronics and other major South Korean companies on Sunday announced fresh domestic investment plans at a meeting with President Lee Jae Myung, who hopes the moves will counter concerns that the firms would prioritise US investments under a trade deal.

Lee’s meeting with business leaders came days after his government finalised a trade deal with the United States, in which Seoul pledged to invest $350 billion (€301.41bn) in US industries. That’s in exchange for the Trump administration agreeing to withdraw its highest tariffs.

Samsung, a global leader in computer chips, said it will invest 450 trillion won (€265.76bn) over the next five years to expand its domestic operations. Plans involve building another production line at its Pyeongtaek manufacturing hub to meet surging global semiconductor demands fuelled by artificial intelligence.

Samsung said the new line, set to begin operations in 2028, is part of its broader effort to secure additional production capacity in anticipation of rising mid- to long-term demands for memory chips. The company also plans to build AI data centres in the country’s southwest South Jeolla Province and the southeastern city of Gumi to support government efforts to reduce the development gap between the greater Seoul metropolitan area and other regions.

Hyundai Motor Group, South Korea’s largest automaker, said it plans to invest 125tr won (€73.82bn) from 2026 to 2030 to expand domestic research and development and advance new technologies such as AI, robotics, and self-driving cars.

SK Group, another semiconductor powerhouse, and shipbuilders Hanwha Ocean and HD Hyundai also announced plans to increase their domestic investments. Both are central to South Korean commitments to boost the US shipbuilding industry, a sector highlighted by President Donald Trump in negotiations with Seoul.

In his meeting with the companies’ chiefs, Lee credited the business sector for helping his government negotiate the trade deal with Washington but urged the companies to maintain strong domestic investments to ease concerns they might cut spending at home to invest more in America.

He said his government is exploring various policy steps, including easing regulations, to help create a more favourable business environment for the companies.

SK Chair Chey Tae-won, whose group plans to invest at least 128tr won (€75.59bn) domestically through 2028 with a focus on AI, said the finalisation of trade talks with the United States eases uncertainties and paves the way for bolder domestic investment.

The two governments on Friday released the details of the trade agreement, including $150bn (€129.19bn) in South Korean investments in the US shipbuilding sector and an additional $200bn (€172.25bn) in other American industries, which Seoul says will be capped at $20bn per year to prevent financial instability.

The United States agreed to reduce tariffs on South Korean cars and auto parts from 25% to 15%, and to apply tariffs on South Korean semiconductors on terms “no less favourable” than those granted to comparable competitors in the future.