Korea’s foreign investment in high tech surges by 226%

"Korea is a powerhouse in high technology; therefore, the infrastructure is well-established."

This is what Peradach Patanachan, CEO of B.Grimm Power Korea, said about the reason behind the company's substantial investment in Korea. "Korean companies are rapidly making decisions and valuing partnerships," Mr. Patanachan said.

Earlier this month, B.Grimm Power, the renewable energy arm of Thailand's oldest company, B.Grimm (celebrating its 145th anniversary this year), announced a $500 million investment in wind power generation in Korea. Of this amount, $300 million will fund the development of an offshore wind farm for installing generators off the coast of North Jeolla Province and South Jeolla Province. In comparison, $200 million will be allocated to constructing a new 'gearless wind turbine' factory. Mr. Patanachan anticipates that the completion of the factory in two years will create approximately 200 jobs.

Foreign investment in high-tech industries, such as electrical and electronic, chemical technology, machinery and equipment, precision medicine, and pharmaceuticals, is rising. According to the Korea Trade-Investment Promotion Agency (KOTRA), $7.39 billion was reported in the high-tech sector for Foreign Direct Investment inflows from January to September. This marks a remarkable 226.3 percent increase over four years, soaring from $2.25 billion in 2019. The share of high-tech investment in total foreign investment also rose from 17% in the first three quarters of 2019 to 31% in the same period this year.

Driven by solid investment in the high-tech sector, overall FDI inflows through the third quarter of this year reached a record high of $23.947 billion. This marks the highest figure for the first three quarters. The 'Invest Korea Summit,' a foreign investment promotion event hosted by the Ministry of Trade, Industry, and Energy (MOTIE) and organized by KOTRA's Invest Korea, held from November 6 to 8, also attracted a total of $940 million in investments, the highest since the summit began in 2006.

The primary reason high-tech companies are drawn to Korea is their belief in its well-established infrastructure. Korea hosts numerous world-leading companies in high-tech industries, including semiconductors, automobiles, steel, shipbuilding, batteries, displays, and home appliances. The concept is that investing in Korea can generate a synergy effect with these companies. It's safe to say that Samsung Electronics and Hyundai Motor have significantly attracted overseas high-tech investments to Korea.

When Bloomberg Media surveyed 464 companies based in the U.S., Singapore, and Australia that have invested in or are interested in Korea in September, 49.0% (with duplicate responses possible) stated 'capitalizing on Korea's technology and high-tech industries' as their expected benefits of investing in Korea.

The government's tax incentives have also played a role. In April, the Ministry of Trade, Industry, and Energy announced an expansion of a cash support program providing subsidies of up to 50 percent of the investment amount for foreign-invested companies in National High-tech Strategic Technology sectors, such as semiconductors, secondary batteries, and displays.