Foreign Investment of $34.57 Billion Last Year... Record High for Two Consecutive Years

Up 5.7% Year-on-Year
'Record High' Led by Manufacturing Industry

Foreign Direct Investment (FDI) has set a record high for the second consecutive year. The manufacturing sector led the overall performance increase, growing by more than 21% compared to the previous year.

According to the Ministry of Trade, Industry and Energy on the 7th, last year’s foreign direct investment (based on reported figures) amounted to $34.57 billion, a 5.7% increase compared to the same period the previous year. Following the record high of $32.71 billion in 2023, last year surpassed that figure again. The amount of funds actually received was $14.77 billion, up 24.2%.

An official from the Ministry of Trade, Industry and Energy said, "Despite the persistent uncertainties in domestic and international conditions, such as political changes in major countries including the U.S. presidential election and ongoing geopolitical conflicts, foreign direct investment achieved another record high last year." He added, "In particular, investments in advanced industries such as semiconductors (46.5%) and bio (254.2%) increased significantly, and investment in materials, parts, and equipment also reached a record high of $11.13 billion (52.7%), which is expected to contribute to expanding domestic advanced industry production capacity and strengthening supply chains."

The manufacturing sector drove the overall performance increase. Manufacturing recorded the highest amount of $14.49 billion, up 21.6% from the previous year. Investment increased in sectors such as electrical and electronics ($5.26 billion, 29.4%), machinery equipment and medical precision ($2.35 billion, 174.0%), and pharmaceuticals ($710 million, 113.2%). The service sector recorded $17.83 billion, a 0.3% increase.

By country, investment from Japan recorded $6.12 billion (375.6%), and investment from China was $5.79 billion (266.1%), showing significant growth. In contrast, investment from the United States and the European Union (EU) recorded $5.24 billion (-14.6%) and $5.1 billion (-18.1%), respectively. The Ministry analyzed that the decrease in U.S. and EU investment was influenced by a reverse base effect compared to the previous year and a wait-and-see attitude due to political changes such as leadership transitions in the U.S. and EU.

By investment type, greenfield investment for new and expanded factories recorded $26.7 billion, a 13.5% increase from the previous year. Greenfield investment set a record high, and the Ministry expects it to contribute to job creation and regional economic revitalization. On the other hand, mergers and acquisitions (M&A) investment decreased by 14.5% to $7.86 billion.

By region, the share of investment outside the metropolitan area was 23.7%, which decreased compared to the previous two years but remained higher than the levels from 2019 to 2021 (13.2% to 23%).

Minister An Deok-geun of the Ministry of Trade, Industry and Energy said, "The record high foreign investment of $34.57 billion last year under challenging domestic and international conditions shows that global investors still trust the fundamentals of the Korean economy despite recent domestic circumstances." He added, "This year, we plan to make every effort to further expand the attraction of high-quality foreign investment by increasing communication with global investors, strengthening incentives for advanced industries, and creating an investment environment that meets global standards."