FDI arrivals hit record high through Q3, up 30.6% to $14.87b

Foreign direct investment arriving in South Korea reached nearly $14.9 billion through the first nine months of this year, setting an all-time high for any cumulative third-quarter period. Declared investment also climbed to $22.9 billion, a more than 10 percent increase that ranked third-highest on record for the same period.

Analysts said the sustained inflows reflect continued confidence in South Korea's economic fundamentals, even as prolonged tensions in the Middle East and other external uncertainties weigh on the global investment climate.

FDI arrivals for the January–September period totaled $14.87 billion, up 30.6 percent from the same period last year, the Ministry of Trade, Industry and Energy said Wednesday. The figure is the highest ever recorded on a cumulative third-quarter basis.

Declared investment over the same period rose 10.8 percent year-on-year to $22.9 billion, the third-highest figure on record for the period, underscoring the continued upward trend in foreign investment.

By investment type, greenfield investment — covering the construction and scale-up of factories and business facilities — rose 4.0 percent to $18.52 billion in declared investment. After contracting 19.8 percent in the first quarter, greenfield investment recovered steadily and turned positive on a cumulative basis through the third quarter.

Mergers and acquisitions investment jumped 53.1 percent to $4.38 billion.

By sector, manufacturing investment declarations fell 34.5 percent from last year to $5.72 billion, dragged down by declines in chemicals (down 28.1 percent) and electrical and electronics (down 38.5 percent). However, machinery, equipment and medical precision instruments surged 145.1 percent, and non-metallic mineral products rose 13.0 percent.

Services investment declarations grew 27.8 percent year-on-year to $14.21 billion, with most subsectors posting gains — finance and insurance up 29.8 percent and real estate up 72.6 percent. Information and communications, including data centers, also posted strong growth of 35.8 percent.

Investment declarations in electricity, gas, water, environmental services and construction — a category that includes clean energy generation projects — surged 279.5 percent year-on-year to $2.95 billion.

By country, US investment declarations rose 35.1 percent from a year earlier to $6.69 billion, driven by a large number of high-potential investments in semiconductor materials, components and equipment, as well as data centers. EU investment declarations edged down 3.9 percent to $2.41 billion, while Japan fell 47.9 percent and China dropped 39.7 percent compared with last year.

The ministry said it plans to pursue a range of investor relations activities to capitalize on growing domestic investment opportunities, citing the push for three major mega-projects and the development of regional growth engines across five hubs and three special zones.

"We will actively conduct IR activities at home and abroad — including Invest Korea Summit, the country's largest investment event — to sustain the momentum in high-potential sectors such as semiconductor materials, components and equipment, and data centers," the ministry said. It added that it would strengthen support to help resolve on-site difficulties faced by foreign-invested companies, with the aim of turning declared investment into actual arrivals and encouraging additional investment.