[2027 Budget Plan] 21.3 Trillion Won for AI and Semiconductor Super Gap...6 Trillion Won Invested in Southwestern Cluster Over 4 Years

3.1 Trillion Won for Physical AI...3.4 Times This Year's Budget

5.2 Trillion Won Invested in Proprietary AI Model Development

The government will allocate a budget of 21.3 trillion won for next year—nearly double this year’s amount—to bolster advanced industries, such as artificial intelligence (AI) and semiconductors. About 4 trillion won has been set aside to secure 10,000 top-tier graphics processing units (GPUs). Furthermore, 2 trillion won has been allocated for physical AI field demonstrations and core technology development. The strategy is to make semiconductors, physical AI, and AI data centers (AIDCs) the key pillars, while also expanding infrastructure including electricity, water supply, and industrial complexes to ensure timely private investment.

On September 1, the Ministry of Planning and Budget presented the 2027 budget proposal, including the ‘Three Major Mega Projects + AI Support’ plan, at a Cabinet meeting. To maintain the K-semiconductor industry’s technological edge, 3.4 trillion won will be invested. A budget of 100 billion won has been allocated for infrastructure expansion to facilitate early operation of semiconductor fabs in Yongin and Pyeongtaek, and a four-year total of 6 trillion won—starting with 1.5 trillion won next year—will be provided to support the establishment of the Southwest Semiconductor Cluster. For the relocation of the Gwangju military airport, 300 billion won out of the total project cost of 700 billion won is allocated for next year. A budget of 1.3 trillion won has been earmarked for indigenous AI semiconductor source technology and talent cultivation. Related research and development (R&D) funding has increased by 18.5% to 546.6 billion won compared to 461.2 billion won this year. Additionally, 20 billion won will be invested in advancing K-AI semiconductors, and 48 billion won in establishing a cooperation fab for prototyping and demonstration of compound semiconductors.

3.1 Trillion Won for Physical AI... Over Threefold Expansion

The budget for the ‘physical AI’ sector will be increased 3.4 times, from 900 billion won this year to 3.1 trillion won next year. The plan is to go beyond having AI simply analyze information and provide answers, enabling it to combine with robots so that it can handle human tasks in manufacturing, construction, and agriculture. The government has designated eight sectors as targets for field demonstrations, including manufacturing, smart factories, construction, agriculture, public defense, public caregiving, public logistics, and ports. Out of the total budget, 500 billion won will be spent on field demonstrations next year and 2.6 trillion won on the entire initiative. Investments are distributed by sector: 172.8 billion won for smart factories, 118.2 billion won for manufacturing, 58.5 billion won for construction, and 20.8 billion won for agriculture.

The public sector will also play a leading role in creating early markets. Over 2,000 domestically produced AI robots will be introduced across research, education, national defense, police and fire departments, caregiving, and agri-food sectors. A total of 1.5 trillion won will be invested in developing core physical AI technologies, 300 billion won will support AI solutions that digitize the experience and know-how of skilled workers in manufacturing, and 100 billion won will go toward full-stack AI factories (where the entire manufacturing process implements AI).

Integrating AI into industrial sites requires sufficient data processing capacity. The budget for building the AIDC industrial ecosystem will be increased by 150% from 200 billion won this year to 500 billion won next year. Specifically, 66.8 billion won will be provided for construction of a test lab to verify key component performance, 21 billion won to help promising companies commercialize and export their products, and 154.5 billion won for R&D on materials, components, equipment related to servers, power, cooling, as well as cloud technology development.

2.1 Trillion Won for Power and Water at AIDC Centers

To ensure smooth operation of advanced industries with massive energy needs, a total of 2.1 trillion won will be invested in power supply, water resources, and industrial complex infrastructure. For power grids, 88.1 billion won will be newly allocated for underground transmission networks in semiconductor industrial complexes and high-voltage substations, and 65.8 billion won for building substations suitable for high-tech industrial locations. To stabilize the grid, 610.8 billion won will support grid connection of renewable energy and construction of energy storage systems (ESS) for surplus power storage and usage.

On the water supply side, in response to a surge in new production facilities for semiconductors and other advanced industries, 127.7 billion won will be invested in expanding water resources infrastructure and 250 billion won will be newly injected into Korea Water Resources Corporation. Additionally, 200 billion won will be allocated to enhancing accessibility within the Saemangeum industrial complex, including creating new long-term lease sites, joint logistics centers, and access roads.

5.2 Trillion Won for Independent AI Models... 10,000 GPUs Secured

For the development of frontier-level AI models and the realization of ‘AI for Everyone’, a budget of 12.2 trillion won has been set—45.2% more than this year. Of this, 5.2 trillion won will be invested in the development of independent AI models, including 3.9 trillion won to secure 10,000 top-tier GPUs, 800 billion won for training data, and 25 billion won to bring in 20 foreign researchers. An additional 250 billion won will support the development of accessible nationwide AI services based on these independent models so that anyone in the country can easily use AI without burden.

To broaden access to ‘AI for Everyone’ services, 250 billion won will go toward developing public and private AI agent services that can handle tasks such as public service applications and travel planning; these will be provided free of charge to the public. To strengthen foundational AI capabilities for all citizens, a large budget of 2.1 trillion won will provide customized AI education and training for a total of 3.9 million people, spanning elementary, middle, and high school students, university students, and working professionals.

41.4 Trillion Won Invested in Post-Semiconductor Growth Engines

Separately, 41.4 trillion won will be invested in fostering post-semiconductor and advanced strategic industries, up 5.2 trillion won (14.4%) compared to 36.2 trillion won this year. Investment in advanced strategic industries will increase from 11.2 trillion won to 15 trillion won, with 1.8 trillion won going to aerospace, 1.7 trillion won to biotech, 1.1 trillion won to mobility, 700 billion won to next-generation energy sources such as nuclear power, and 400 billion won to defense industries. The number of autonomous vehicle test units will be increased from 200 to 3,000, and three urban air mobility (UAM) demonstration units will be introduced. R&D investment will also be raised from 35.5 trillion won to 39.5 trillion won to secure new growth engines for the post-semiconductor era.

This content was produced with the assistance of AI translation services.