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Gov't, private sector launch joint $102 billion fund to accelerate advanced tech development

Published: 11 Dec. 2025, 19:44

Financial Services Commission Chairman Lee Eog-weon, sixth from left, joins Mirae Asset Group Chairman Park Hyeon-joo, Celltrion Group Chairman Seo Jung-jin, Korea Development Bank Chairman Park Sang-jin and others in pressing the lighting button during the launch ceremony for the 150 trillion-won National Growth Fund at Korea Development Bank in Yeouido, western Seoul, on Dec. 11. [BYUN SUN-GOO]

Korea set out a five-year, 150 trillion-won ($102 billion) fund to support investment in AI, semiconductors and other advanced sectors on Thursday as the government tries to strengthen the country’s industrial base. Critics say officials still need to devise effective support measures and identify credible projects.

The Financial Services Commission (FSC) introduced its National Growth Fund at a launch event at Korea Development Bank's (KDB) office in western Seoul, where officials also convened the first meeting of a strategy committee made up of both government representatives and private-sector leaders.

The announcement marked one of the government’s largest attempts yet to steer private and public capital toward the technologies it considers crucial for long-term growth.

FSC Chair Lee Eog-weon called the moment urgent, saying “the country must mobilize all its capabilities” and emphasizing that “the 150 trillion won National Growth Fund and the 530 trillion won in productive finance pledged by major financial institutions must produce results that match the scale of these commitments.”

The National Growth Fund combines 75 trillion won from a fund for strategic industries financed through government-guaranteed bonds with 75 trillion won in private investment. Government officials described the private share as a minimum target and said market conditions could bring in more.

The government appointed two of the country’s most prominent business figures — Celltrion Group Chair Seo Jung-jin and Mirae Asset Group Chair Park Hyeon-joo — as co-chairs of the strategy committee alongside Lee. The group also includes Lee Byung-heon, head of the presidential committee for decentralization and balanced development; Inertia CEO Kim Hyo-yi; and Newbility CEO Lee Sang-min, reflecting a blend of regional, youth and industry voices.

President Lee Jae Myung delivers opening remarks during a briefing on the National Growth Fund at Mapo District, western Seoul, on Sept. 10. [PRESIDENTIAL OFFICE]

Emphasis on AI and regional investment

Officials identified 11 priority sectors, with AI receiving the largest allocation at 30 trillion won over five years, or about one-fifth of the total. Semiconductors follow at 20.9 trillion won, then mobility at 15.4 trillion won and bio and vaccine technologies at 11.6 trillion won. More than 40 percent of the fund’s resources will go to projects outside the greater Seoul area to support balanced regional growth.

The government said the fund will not focus solely on large-scale national champions. It intends to back small- and midsize companies as well, using long-horizon investment vehicles to support early technologies and firms that may take more than a decade to mature. Officials also hope that direct equity investments will help cultivate companies valued at more than 10 trillion won.

Reliance on loans draws questions

Despite the scope of the fund, critics say its financial structure raises concerns.

The FSC disclosed that 50 trillion won — the largest share of the fund — will go to ultra-low-interest loans. Direct investment will account for 15 trillion won and indirect investment through equity funds will cover the remaining 35 trillion won. Financial authorities have long relied on loans and guarantees to support companies.

Critics argue that loans can ease short-term financial strain for companies but do not necessarily help the government identify the technologies most likely to shape the country’s industrial future.

Apartment complexes in Seoul are seen from the Lotte World Tower in Songpa District, southern Seoul, on Oct. 15. [NEWS1]

Finding promising projects may prove just as difficult. The FSC and KDB have begun reviewing candidates for the first round of funding. Several large projects have emerged as leading possibilities, including a national AI computing center in Haenam County in South Jeolla, SK hynix’s semiconductor cluster in Yongin, Gyeonggi and an offshore wind project in Shinan county, South Jeolla.

Local governments, ministries and companies have also submitted roughly 100 proposals totaling 153 trillion won. But the government still needs to sort out which advanced technologies are genuinely promising.

“If the government mostly expands loans, financially weak SMEs might simply refinance existing debt at lower rates rather than invest in growth,” said Kim Sang-bong, an economics professor at Hansung University. “The government must tighten standards to identify companies and technologies that can drive innovation and expand direct investment.”

To speed the process, the government simplified its approval structure. A new Investment Review Committee made up of industry experts, financial specialists and KDB officials will conduct initial assessments for each proposal. A fund management committee will make final decisions on investments that rely on money from the government’s advanced industry fund.

KDB will host a new National Growth Fund secretariat, and the government plans to establish an interministerial task force to coordinate management. Officials expect to convene a fund management committee meeting later this month to confirm next year’s investment plan.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM NAM-JUN [[email protected]]