South Korea unveiled an investment drive of nearly $1.2 trillion across semiconductors, AI data centers, and physical AI, a sum equal to over two-thirds of the country's GDP. Yahoo Finance (AFP) reported that the AI data center track targets 8.4 gigawatts in an initial phase, scaling to 18.4 gigawatts by 2035. A separate 10-gigawatt facility is planned by the same year. At that density, the thermal math is settled before a single rack ships.
President Lee Jae Myung framed the program around speed, with Industry Minister Kim Jung-kwan and Science Minister Bae Kyung-hoon leading the flagship megaprojects. SK Group, GS Group, and Naver are committing 550 trillion won toward the data center buildout. Total AI capacity investment is projected at 1,000 trillion won over the horizon.
A fleet this large running modern accelerators lands well past the threshold where air alone moves the heat. Rack densities at AI scale put liquid cooling in the default position. At this load it becomes a physical requirement of the build, locked in before the first foundation pour. Cold plates, CDUs, and warm-water loops become the procurement line items that determine whether 18.4 gigawatts ever comes online.
The government promised adequate electricity and industrial water, with roughly 1 million tons per day available in the target region. That number is not incidental. Concerns about heavy water demand from the combined semiconductor and data center cluster prompted the pledge in the first place.
Samsung Electronics and SK hynix will spend 800 trillion won, about $518 billion, on two new chip fabs each in the southwest, across the Honam and Jeolla provinces. Fabs and AI halls now compete for the same watershed. That collision is exactly the water-versus-power tradeoff operators keep underpricing when they size heat rejection.
One million tons a day sounds like headroom until you spread it across 18.4 gigawatts of IT load plus four fabs. Evaporative towers buy power efficiency and burn water. Closed-loop and warm-water designs protect the watershed and shift the penalty back onto the grid, the same constraint already throttling data center development elsewhere. Every operator in Honam will pick a side of that ledger before they pour a foundation, and the pick is a cooling decision first.