South Korea draws record FDI in 2025 as investor sentiment improves

SEOUL, January 07 (AJP) - South Korea’s foreign direct investment (FDI) reached a record high last year, rebounding strongly in the second half after a sluggish start, government data showed on Wednesday.

FDI commitments in 2025 rose 4.3 percent from a year earlier to $36.05 billion, the highest level on record, according to the Ministry of Trade, Industry and Energy. Funds actually received increased 16.3 percent to $17.95 billion, the third-highest total to date.

The ministry said the recovery came despite a 14.6 percent year-on-year decline in the first half, attributing the turnaround to improved investor sentiment following the launch of a new government. It cited restored confidence in the economy, reduced policy uncertainty and stronger expectations linked to the government’s push on artificial intelligence and investment promotion efforts tied to the Asia-Pacific Economic Cooperation summit in Gyeongju.

Greenfield investment for new or expanded facilities rose 7.1 percent to a record $28.59 billion, the ministry said. The investment included “quality” projects in advanced industries, such as Amazon Web Services’ artificial intelligence data center and Amkor Technology’s semiconductor back-end processing facilities, the ministry said.

By sector, manufacturing investment rose 8.8 percent to $15.77 billion, reflecting increased investment in key materials used in advanced industries. Investment in chemicals surged 99.5 percent to $5.81 billion, while metals jumped 272.2 percent to $2.74 billion. Electrical and electronics investment fell 31.6 percent to $3.59 billion, and machinery, equipment and medical precision dropped 63.7 percent to $850 million.

Investment in services rose 6.8 percent to $19.05 billion, driven by expanded investment in areas such as AI data centers and online platforms.

By country, U.S. investment surged 86.6 percent to $9.77 billion. Investment from the European Union rose 35.7 percent to $6.92 billion. Japanese investment fell 28.1 percent to $4.40 billion, while Chinese investment declined 38 percent to $3.59 billion.