Seoul has announced it would build the biggest chip center in the world, largely using some 300 trillion won (roughly $230 billion or €220 billion) of private investment from electronics giant Samsung over the next 20 years.
The chip manufacturing "mega cluster" of facilities will be built in various locations in Gyeonggi province by 2042.
The center will be anchored by five new semiconductor plants built bySamsung.
The South Korean government seeks to invest heavily in six technology areas including chips, displays, rechargeable batteries, electric vehicles, robotics and bio-technology.
Although the country is well established in these sectors, the government hopes to tap into the growing demand due to adoption of new technologies like 5G wireless networks, artificial intelligence, and self-driving cars.
According to President Yoon Suk-yeol, South Korea will "build the world's largest scale system semiconductors cluster in the capital areas using massive private investments worth 300 trillion won."
Speaking at an economic policy meeting, Yoon said: "Speed is important. The government will do its best to realize the cluster project."
The semiconductor center will aim to attract 150 other companies which will be producing materials and components or designing high-tech chips, according to South Korea's Ministry of Trade, Industry and Energy.