South Korea’s Foreign Investment Notifications Rise 10.8% in Third Quarter

Foreign direct investment notifications in South Korea rose 10.8 percent from a year earlier in the third quarter, supported by demand for semiconductors and artificial intelligence infrastructure, government data showed Wednesday.

Investment notifications totaled $22.9 billion during the July-to-September period. Actual investment arrivals increased at a faster pace, climbing 30.6 percent year on year to $14.87 billion, according to the Ministry of Trade, Industry and Resources.

The figures point to continued foreign interest in South Korea’s advanced manufacturing base despite uncertainty generated by prolonged tensions in the Middle East. The ministry said the country’s underlying economic strength appeared to have helped attract investment in a difficult external environment.

Manufacturing expansion accounted for most of the notified investment. Projects involving the construction or enlargement of production facilities represented 80 percent of the total, amounting to $18.52 billion. The remaining share was directed toward mergers and acquisitions.

Investment patterns differed sharply by origin. Notifications from the United States jumped 35.1 percent to $6.69 billion, making the US increase a major contributor to the overall gain. By contrast, notified investment from several other major partners declined.

Notifications from the European Union fell 3.9 percent to $2.41 billion. Investment from Japan dropped 47.9 percent to $1.88 billion, while notifications from China decreased 39.7 percent to $1.74 billion. The regional breakdown shows that the headline increase was not broad-based, even as the overall total moved higher.

The government plans to concentrate its investment-promotion efforts on semiconductors, physical AI and AI data centers. It has identified the three areas as growth engines for Asia’s fourth-largest economy.

The rise in both notifications and completed arrivals is significant because the two measures capture different stages of investment. Notifications reflect announced commitments, while arrivals indicate capital that has actually entered the country. Stronger growth in arrivals therefore suggests that previously planned projects are moving into execution.

South Korea is seeking to use its established semiconductor supply chain and expanding AI infrastructure market to secure new facilities and technology investment. The latest data indicate that those sectors are helping offset weaker investment flows from some neighboring economies and Europe, although the concentration of growth in US-origin projects remains a point to watch.