Chip, energy and logistics firms pledge $920M in investements in Korea

Home > Business > Industry

Chip, energy and logistics firms pledge $920M in investements in Korea

Published: 06 Nov. 2024, 18:32 Updated: 06 Nov. 2024, 18:54

LEE JAE-LIM
[email protected]

Audio report: written by reporters, read by AI

Seven global companies pledged to invest $920 million at the Invest KOREA Summit 2024 that is being held throughout Friday. From left, Yu Jeoung-yeol, President of the Korea Trade-Investment Promotion Agency, Thomas Wibe Poulsen, CIP’s Asia-Pacific head, Lee Yun-su, Asia-Pacific general manager at Prettl, TOWA Korea CEO Han Sang-yoon, Trade Minister Ahn Duk-geun, Equinor Korea CEO Bjorn Inge Braathen, Nam Sun-woo, CEO of ESR Kendall Square’s Korean platform, Hexicon CEO Marcus Thor, Kim Do-young, DP World’s senior vice president of North Asia, pose for the photo at the commemorative investment ceremony at Gangnam District, southern Seoul, on Wednesday. [KOTRA]

Seven foreign companies in the semiconductor, energy and logistics sectors will invest a total of $920 million in Korea, according to the Ministry of Trade, Industry and Energy on Wednesday.

The pledge was made during the annual Invest KOREA Summit 2024 that kicked off on Wednesday. This year’s three-day event is expected to bring together over 2,000 domestic and global companies, investors, embassies and local governments.

TOWA, a Japanese semiconductor equipment firm, will inject funds to build an additional plant in Cheonan, South Chungcheong.

In the automotive electronic components sector, Germany’s Prettl said it will expand its business in the country beyond its focus on auto parts to include such sectors as secondary batteries, electronic components, healthcare and air conditioning systems.

In the offshore wind power sector, Denmark's CIP, Norway's Equinor and Sweden's Hexicon reported their investment plans for Korea. In the logistics sector, Singapore’s ESR Kendall Square and the United Arab Emirates’ DP World also announced plans for investment in the country.

IT giant HP and Vestas, a wind turbine manufacturer in Denmark, will each establish Asia-Pacific regional headquarters in Korea.

This designation of global regional headquarters is the first of its kind in nine years since the designation of five global companies in 2015.

Foreign Direct Investment (FDI) to Korea posted a record-high of $25.2 billion for the January-September period this year.

However, global economic uncertainties are expected to affect the nation’s GDP and FDI for next year, according to the Trade Ministry.

“The GDP growth rate is projected to be similar to this year, as seen in reports from Organisation for Economic Cooperation and Development [OECD] and the International Monetary Fund [IMF], but the FDI figure might fall a little compared to this year,” said Trade Minister Cheong In-kyo at the press conference for the summit held at the Grand InterContinental Seoul Parnas in Gangnam District, southern Seoul, on Wednesday. “Despite such circumstances, Korea has established a stable business environment, and the government’s continuous efforts to attract foreign investment, along with improvements in infrastructure, are ongoing.”

The OECD cut Korea’s 2024 economic growth by 0.1 percentage point to 2.5 percent in September compared to May’s projection, citing weaker-than-expected domestic demand, with 2025 economic growth forecast at 2.2 percent.

The minister cited the possibility of a surge in trade from the chip sector as Taiwan’s chipmaker, TSMC, begins operations at its first plant in Kyushu, Japan, at the end of this year, part of the company’s ongoing global expansion to diversify its supply chain.

“This relocation of production from Taiwan to the Kyushu region, which is closer to Korea, and anticipated to result in significant manufacturing activities,” he said. “This move could potentially boost the supply contributions from Korean component and material companies to TSMC’s Kyushu plant.”

The minister also expressed high hopes for the state-backed Yongin chip cluster that is undergoing construction in Gyeonggi, carrying the country’s ambition to create the world’s largest chip hub. SK hynix, the primary chip supplier to Nvidia, pledged to allocate 122 trillion won into building four chip fabrication lines for the mega cluster.

The summit, hosted by the Trade Ministry and organized by Invest KOREA under the Korea Trade-Investment Promotion Agency, will feature town hall meetings aimed at connecting regional government agencies with foreign investors. Moreover, a startup forum will bring together 50 global investors and 120 domestic startups to explore potential investment opportunities. Tours of local industrial complexes in free economic zones, which have been halted since Covid-19 pandemic, will resume as well.

BY LEE JAE-LIM [[email protected]]