Tuesday, September 25, 2018
Record High Inward FDI
FDI in S. Korea Hit a New High in the First Half
Record High Inward FDI
  • By Jung Suk-yee
  • July 5, 2018, 11:43
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Foreign direct investment (FDI) in the Korean manufacturing sector rose 155% from a year ago, led by joint investment for global value chain related to Industry 4.0 technology.
Foreign direct investment (FDI) in the Korean manufacturing sector rose 155% from a year ago, led by joint investment for participation in the global value chain and investment related to Industry 4.0 technology.

The Ministry of Trade, Industry and Energy announced on July 4 that the reported amount of foreign direct investment (FDI) in South Korea totaled US$15.75 billion in the first half this year, up 64.2% from a year ago. 

The amount of FDI that actually arrived totaled US$9.46 billion during the same period, posting a year-on-year growth of 76.4%.

For reference, the previous high in terms of reported FDI was US$10.56 billion, which was posted in the first half of 2016.

The ministry explained that the new high recorded at this time is based on South Korea’s robust economic fundamentals. South Korea’s monthly exports recently topped US$50 billion for four months in a row and durable goods consumption is on the rise in the country with the local semiconductor and petrochemical markets enjoying a boom. In addition, investments in key materials, components and equipment such as auto parts, semiconductor wafers and precision machinery are showing a solid growth and global IT and mobile companies are increasing their investments in South Korea as a test bed for their new information security platforms and mobile games.

Investments from traditional partners such as the United States, the EU, China and Japan are increasing along with those from the Middle East and the Greater China Region. For example, the actual investment from the U.S. increased 163% to US$1.71 billion, led by investments in the fields of e-commerce, cloud computing, biopharmaceuticals, etc. The reported and actual investments from China jumped 360% and 558.8% to US$2.2 billion and US$0.72 billion, respectively.

The investment in the manufacturing sector rose 155% from a year ago, led by joint investment for global value chain participation and facility expansion related to Industry 4.0 technology. The rate of increase in the service sector was 25.3% and investment in information and communications technology, fintech and digital content led the growth.

Greenfield investment showed a growth of 62.7% with more investment made in major industries like automobile and semiconductor and the service sectors including real estate and logistics. M&A investment increased by 71.2% based on a number of large-scale M&A deals.