S. Korea’s FDI Arrivals Hit Record $14.8 Billion in First Nine Months

Actual Investment Surges 30.6% as U.S. Capital Flows Into Semiconductors and AI, Despite Weaker New Commitments

Foreign direct investment (FDI) actually invested in South Korea reached a record high in the first nine months of this year, driven by strong inflows into advanced industries such as semiconductor materials, parts and equipment and artificial intelligence (AI) data centers. The increase underscores continued foreign investor interest in South Korea’s growth industries.

According to the Ministry of Trade, Industry and Energy’s “Trends in Foreign Direct Investment for Q3 2026,” released on Oct. 7, cumulative FDI arrivals through September totaled $14.87 billion, up 30.6% from the same period last year and the highest level ever recorded for the first three quarters of a year. FDI declarations, which represent newly announced investment commitments, rose 10.8% to $22.9 billion, ranking third-highest for the same period.

By investment type, greenfield investment declarations for new factories and capacity expansions rose 4.0% to $18.52 billion. The increase marked a turnaround from the 19.8% decline recorded in the first quarter. Merger and acquisition (M&A) investment declarations also posted strong growth, rising 53.1% to $4.38 billion.

By sector, services led overall investment growth with $14.21 billion in declared investment. Finance and insurance rose 29.8%, while real estate investment increased 72.6%. Investment in information and communications, which includes data centers, also grew 35.8%. Investment in electricity, gas and water, which includes clean energy projects, surged 279.5%.

Manufacturing investment declarations, by contrast, fell 34.5% year on year to $5.72 billion, mainly due to declines in chemicals and electrical and electronics investment, which fell 28.1% and 38.5%, respectively. On an arrivals basis, however — reflecting capital actually invested — manufacturing FDI reached $6.25 billion, up 110.6% from a year earlier, highlighting a sharp divergence between new investment commitments and actual capital inflows.

The United States was the largest source of growth among major investing countries. U.S. investment declarations reached $6.69 billion, up 35.1% from a year earlier, reflecting increased investment in key growth sectors such as semiconductor materials, parts and equipment and data centers. Investment from the European Union fell 3.9%, while declarations from Japan and China dropped 47.9% and 39.7%, respectively.

In terms of actual FDI arrivals, however, the EU saw a sharp increase, with inflows surging 93.7% to $4.84 billion. Japan also recorded a 63.0% increase in actual investment, despite the decline in newly announced commitments. U.S. arrivals remained broadly unchanged at $3 billion, while Chinese investment arrivals fell 41.5%, extending the decline seen in new investment declarations.

The Ministry of Trade, Industry and Energy plans to expand opportunities to attract foreign investment, focusing on three major projects in semiconductors and AI. It will strengthen domestic and international investor relations activities, including the Invest Korea Summit and overseas investment attraction caravans, while focusing on removing investment bottlenecks to facilitate both new investments and the execution and expansion of previously announced projects.