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FDI pledges to S. Korea hit record high through Q3: data

October 4, 2023

Foreign direct investment (FDI) pledges to South Korea rose 11.3 percent on-year during the first nine months of this year to reach an all-time high on growing investment in chips, batteries and other advanced sectors, the industry ministry said Wednesday.

The country received US$23.95 billion worth of FDI commitments during the January-September period, compared with $21.52 billion a year earlier, according to the data by the Ministry of Trade, Industry and Energy.

This year’s figure marked the highest amount ever for any nine months of data.

The amount of investment that actually arrived in South Korea also went up 20.2 percent on-year to a record high of $13.92 billion, the data showed.

“Despite global uncertainties, the country saw an increase in foreign investment in such advanced sectors as semiconductors and secondary batteries, which is expected to help strengthen supply chains at home and create more jobs,” the ministry said in a release.

This file photo shows President Yoon Suk Yeol (C) speaking during a ceremony in Paris on June 21, 2023, where a group of European companies announced plans to make investments in South Korea. (Yonhap)
This file photo shows President Yoon Suk Yeol (C) speaking during a ceremony in Paris on June 21, 2023, where a group of European companies announced plans to make investments in South Korea. (Yonhap)

By industry, FDI pledges in the manufacturing sector grew 15.7 percent on-year to $9.02 billion, as foreign investment in the electronics and electric fields surged 27 percent to 3.32 billion while that of the chemical engineering field soared 61.1 percent to $3.01 billion.

The service sector also saw a 9.0 percent on-year rise in FDI pledges to come to $13.8 billion in the January-September period, led by the financial and accommodation fields, according to the ministry.

By investor, the United States vowed to make $5.19 billion worth of investments, down 27.2 percent on-year due mainly to a high-base effect, and investment from Japan also fell 10.5 percent to $930 million.

But investment from the European Union advanced 38.1 percent to $4.0 billion, and that from China, Hong Kong and Taiwan surged 49.9 percent on-year to $2.23 billion, the data showed.

Greenfield investment rose 20.4 percent on-year to come to $16.79 billion, while investment in the form of mergers and acquisitions fell 5.5 percent on-year to $7.16 billion, the data showed.

Greenfield investment refers to when a parent company begins a new venture or establishes new facilities.