S. Korea to pour W39.5tr into R&D next year, W200tr over five years

The government plans to invest a record 39.5 trillion won ($28.8 billion) in national research and development next year and more than 200 trillion won over the five years through 2030. The push will center on three "mega-projects" — AI, semiconductors and physical AI — while simultaneously cultivating future growth engines such as nuclear fusion, quantum technology, aerospace and advanced biotech. The overarching goal is to move South Korea beyond catch-up innovation and establish it as an irreplaceable leader in global technology markets.

According to the Ministry of Science and ICT, the 2027 government R&D budget proposal stands at 39.5 trillion won, up 4 trillion won, or 11.2 percent, from this year's 35.5 trillion won. The core R&D budget allocated and coordinated by the ministry's Science and Technology Innovation Headquarters also rises 11.5 percent to 33.8 trillion won.

Alongside the budget, the government finalized its Second National R&D Mid- to Long-Term Investment Strategy covering 2026 to 2030. The centerpiece is a commitment to invest more than 200 trillion won in government R&D over five years — the first time such a figure has been reached in history.

The strategy sets a target of lifting South Korea's global AI competitiveness ranking from fifth to third by 2030 and breaking into the top five science and technology nations. The self-sufficiency rate for semiconductor materials, components and equipment is to rise from 30 percent to 50 percent, while the domestic production rate for key robot components is to climb from 41 percent to 80 percent.

AI R&D will receive 4.1 trillion won, an increase of 1.7 trillion won, or roughly 70 percent, from this year. The government will pursue development of a "world model" for large-scale synthetic data generation and a general-purpose robot foundation model, with the aim of making South Korea the world's top physical AI power by 2030.

AI data centers will also be nurtured as a national strategic industry. The plan calls for developing domestically produced core solutions, materials, components and equipment to support entry into global value chains, and investment in AI safety technology — including tools to identify vulnerabilities in frontier AI models and control the risks posed by high-risk AI systems — will be expanded.

Semiconductors and displays will receive 1.3 trillion won. The government intends to preemptively develop next-generation HBM, processing-in-memory, neuromorphic chips, compound semiconductors and ultra-fine stacked devices to sustain memory chip competitiveness and secure what it calls "AI semiconductor sovereignty."

Advanced robotics and mobility will receive 1.1 trillion won, a 50 percent increase from this year. The funding will drive domestic production of five core components — reducers, sensors, actuators, grippers and controllers — to a localization rate of 80 percent by 2030 and accelerate the commercialization of physical AI applications including humanoid robots and robotaxis.

Combined R&D investment across the three mega-projects — semiconductors, physical AI and AI data centers — will reach 5.8 trillion won next year.

The seven "SEED" sectors targeting future new industries — small modular reactors, renewable energy, nuclear fusion, quantum technology, aerospace, advanced biotech and advanced supply chains — will receive 3.7 trillion won.

Future energy and nuclear power will receive 1.7 trillion won to advance innovative small modular reactor development, marine molten-salt reactors and nuclear fusion technology, alongside high-efficiency solar cells, large-scale wind power systems, HVDC transmission and next-generation power grid development.

Advanced biotech will receive 2.2 trillion won. The government will establish research hubs combining AI and biotechnology and build a national bio-foundry by 2029, with the ambition of developing three blockbuster new drugs on that foundation.

The quantum sector will receive 370 billion won to develop a domestically produced full-stack quantum computer and a 100-kilometer-class quantum network. Aerospace and marine sectors will receive 2 trillion won, a 35 percent increase from this year, with a goal of ushering in the country's first privately led lunar landing by 2030.

Investment in basic research and regional R&D will also expand. Basic research will receive 3.6 trillion won, and the budget for grassroots fundamental research will more than double from this year's level.

Government-funded research institutes will receive 4.8 trillion won. In line with the planned abolition of the project-based salary system, the government will raise the share of labor costs covered by direct grants and transition to a system in which all labor costs are funded through grants by 2030. Regional R&D investment will also grow by more than 1 trillion won from this year to 4.5 trillion won.

Park In-gyu, head of the Science and Technology Innovation Headquarters, said the past year had been about restoring a research ecosystem that had been shaken, and that the next four years must deliver real results built on that foundation. "We will concentrate investment on the mega-projects and the seven SEED sectors while also pursuing stable investment in basic research, young researchers and regional science," he said.