Actual Inflow of Foreign Direct Investment Reaches Record $14.9 Billion, Up 30.6% Year-on-Year

Cumulative Reported FDI for Q3 Reaches $22.9 Billion, Up 10.8%; Third-Highest on Record
U.S. Reported FDI Up 35.1% with Continued Investments in Semiconductor Materials and AI Data Centers

By the third quarter of this year, actual foreign direct investment (FDI) arrivals in Korea reached nearly USD 15 billion, marking a record high. This surge was mainly driven by continued foreign investment in high-tech industries such as semiconductor materials, components, equipment, and artificial intelligence (AI) data centers. However, there were notable differences across sectors and investment types, as both manufacturing FDI filings and new investments showed a decline.

According to the Ministry of Trade, Industry and Energy, cumulative FDI filings for the first three quarters of this year reached USD 22.9 billion, an increase of 10.8% compared to the same period of the previous year, as announced on October 7, 2026. During the same period, actual FDI arrivals in Korea amounted to USD 14.87 billion, up 30.6%. In terms of cumulative filings through the third quarter, this is the third-highest amount on record; for actual FDI arrivals, it is the highest ever.

By investment type, greenfield filings—those for building new factories or business locations or expanding existing ones—rose 4.0% to USD 18.52 billion. While this figure was down by 19.8% year-on-year after the first quarter, it turned positive in the cumulative tally through the third quarter. Merger and acquisition (M&A)-type filings, such as for corporate equity acquisitions, soared by 53.1% to USD 4.38 billion.

The results varied across industries. Service sector filings increased by 27.8% to USD 14.21 billion. Finance and insurance rose by 29.8% to USD 5.36 billion, while the information and communications sector, including data centers, reached USD 2.43 billion—up 35.8%. Investments in electric power, gas, water, environmental remediation, and construction—including clean energy generation businesses—surged 279.5% to USD 2.95 billion.

In contrast, manufacturing sector filings dropped by 34.5% to USD 5.72 billion. Within this category, chemicals declined by 28.1% to USD 1.77 billion and electronics/electricals fell by 38.5% to USD 1.75 billion. However, the machinery equipment and medical precision sector saw a 145.1% increase, totaling USD 940 million.

By country, investment from the United States was particularly notable. FDI filings from the U.S. reached USD 6.69 billion, a 35.1% increase year-on-year, driven by ongoing investment in semiconductor materials, parts, equipment, and data centers. Filings from the European Union (EU) fell by 3.9% to USD 2.41 billion. Japan and China also saw decreases, with Japan at USD 1.88 billion (down 47.9%) and China at USD 1.74 billion (down 39.7%).

For FDI arrivals—actual funds flowing into Korea—increases in manufacturing were especially prominent. Manufacturing FDI arrivals surged 110.6% to USD 6.25 billion. The chemical sector soared by 256.6% to USD 4.76 billion, and incoming investment in pharmaceuticals (spurred by activity in the bio and pharmaceutical industries) rose 129.0% to USD 280 million. Service sector arrivals grew by 5.6% to USD 8.37 billion.

By country, FDI arrivals from the EU soared 93.7% to USD 4.84 billion. Japanese arrivals also rose by 63.0% to USD 780 million. The United States recorded a slight increase of 0.7% to USD 3 billion, while China fell by 41.5% to USD 260 million.

New FDI filings totaled USD 8.46 billion, a decline of 29.1%. By contrast, reinvestment—additional capital flowing into existing foreign-invested companies—grew 62.0% to USD 11.4 billion, and long-term loans increased 79.0% to USD 3.03 billion. This suggests the overall rise in FDI was mainly driven by additional investment and capitalization in companies with an existing foreign investment presence, rather than the establishment of new investment destinations.

Regionally, both the Seoul metropolitan area and non-metropolitan regions saw an increase in FDI filings. Filings for the capital area rose 43.7% to USD 12.89 billion, and those for non-capital regions climbed 25.8% to USD 4.75 billion. However, FDI arrivals in the metropolitan area rose by 58.2% to USD 12.88 billion, while those in non-metropolitan regions dropped by 39.4% to USD 1.96 billion.

The Ministry of Trade, Industry and Energy plans to leverage three mega-projects—semiconductors, physical AI, and AI data centers—along with the 'five hubs and three specialized zones' regional growth engines, to attract further foreign investment. The ministry aims to ramp up both domestic and overseas investment promotion centered on high-potential areas such as semiconductor materials, components, and data centers, and will provide support to resolve practical challenges faced by foreign-invested companies operating in Korea.

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