FDI pledges to Korea hit $17 billion in first half of 2023

Foreign direct investment (FDI) pledges to Korea rose 54.2 percent on year to $17.09 billion in the first half of this year, hitting an all-time high for any first half, government data showed Tuesday.

President Yoon Suk Yeol speaks during an event in Paris on June 21, where a group of European companies announced plans to invest in Korea. [PRESIDENTIAL OFFICE]

Foreign direct investment (FDI) pledges to Korea rose 54.2 percent on year to $17.09 billion in the first half of this year, hitting an all-time high for any first half, government data showed Tuesday.

The 2023 figure topped 2018's $15.75 billion to become the largest ever for any January-June period, according to the Ministry of Trade, Industry and Energy.

FDI also reached an all-time high for any second quarter at $11.46 billion, the data showed. Quarterly FDI investment rose for a fourth consecutive quarter.

The amount of investment that actually arrived in Korea in the first six months grew 6 percent on year to $7.75 billion, according to the Trade Ministry.

By industry, the manufacturing sector received investment pledges of $7.63 billion in the first half, up 145.9 percent on year, and FDI pledges to the service sector climbed 11 percent to $8.48 billion.

The electric and electronics field, which includes the semiconductor and secondary battery industries, saw foreign investment commitments spike 663 percent on year, and those in chemical engineering soared 464.1 percent.

By regions, FDI pledges from the European Union and Britain more than doubled to $4.26 billion, accounting for 25 percent of total investment pledges made between January and June.

FDI pledges from the United States advanced 24.1 percent to $3.66 billion, and the amount from China, Hong Kong, Singapore, Taiwan and Malaysia also rose 32.8 percent on year to $3.25 billion.

But investment commitments from Japan tumbled 33.4 percent on year to $600 million.

Greenfield investment, which refers to a parent company launching a new venture or establishing new facilities in a foreign country, increased 53.1 percent on year to $12.64 billion. Investment in the form of mergers and acquisitions jumped 57.3 percent to $4.45 billion.

"We have seen a marked growth in foreign investment in the advanced manufacturing industry sectors, such as chips, batteries and bio, as well as new energy industries including wind power and hydrogen, as Korea has a solid foundation for the manufacturing industry and technological prowess," the ministry said in a statement.

The ministry also credited President Yoon Suk Yeol for bringing in $3.14 billion during his overseas state visits, which accounts for 18 percent of the first half’s FDI pie.

President Yoon has been actively promoting economic diplomacy and sales diplomacy since he took office in May last year, claiming to be Korea’s “No. 1 salesman."

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]