Seoul: South Korea's advanced technologies in semiconductors, artificial intelligence (AI), and other key industries will serve as a chance for the country to attract more foreign direct investment (FDI), a senior official from the Singapore-based United Overseas Bank (UOB) has said. The official emphasized that FDI would be a useful tool for South Korea and its companies to achieve growth amid uncertainties.
According to Yonhap News Agency, Sam Cheong, managing director and head of UOB's Group Foreign Direct Investment Advisory, made the assessment in an interview in Seoul on Tuesday. The interview coincided with the bank's launch of an FDI advisory office in the capital city. Cheong remarked, "South Korea definitely is in the forefront of technologies. I think it's very strong in semiconductors and logistics. Companies from different countries will see Korea's long-term potentials that support the economic growth in all these high-tech sectors."
Cheong highlighted the recent surge in AI semiconductors as presenting unique opportunities for Korea to attract more FDI. He noted that fields drawing keen attention from foreign investors also include data centers, hospitality, and commercial buildings. In 2024, FDI pledges to South Korea rose 5.7 percent from a year earlier to a record high of US$34.5 billion, driven by increased investment in the manufacturing sector, based on Seoul government data.
To enhance South Korea's attractiveness to investors, Cheong advised creating an environment conducive to market entry and business initiation, along with enhancing policy coordination through strategic partnership agreements. "Promoting the strength of the country is also very important. I would say that investors are very familiar with Korea in terms of its technology and AI capabilities. I think such things will continue to be key attractions for FDI in the Korean market," he added.
Cheong observed that more South Korean firms are seeking expansion into the Association of Southeast Asian Nations (ASEAN) and other overseas markets, a crucial strategy in the evolving global economic landscape. He noted, "South Korea's economic growth per year is around 2 percent. But when the companies expand to ASEAN, they are immediately entering a market that's growing twice the rate of Korea, an economy that is going to be the fourth largest in the world, plus a population of more than 670 million."
He further mentioned that the supply chain shift demands Korean companies to reconfigure their supply chains both regionally and globally. Cheong also pointed out that the K-wave has boosted Korean brand equity in ASEAN, impacting sectors such as cosmetics, food, and athleisure.
Corporate overseas investment should focus on manufacturing and renewable energy sectors, aligning with ASEAN's net-zero goals, according to Cheong. South Korea is facing multiple economic challenges, including domestic political issues and U.S. President Donald Trump's tariff plans.
The Bank of Korea has forecast the economy to grow 1.5 percent in 2025, a slowdown from last year's 2 percent expansion. Cheong expressed optimism, stating, "In the longer term, we are positive that Korea will continue to grow with its own strength. As I mentioned, you are in the forefront of all this technology advancement and development. So I think that is something that makes us optimistic."
He emphasized the importance of promoting multilateralism and economic openness to enhance trade and investment, ultimately creating more employment and quality jobs. UOB opened an FDI advisory center in Seoul on Wednesday to support South Korean and ASEAN firms investing in broader regional markets, marking the bank's 11th such center across Asia.