"150 Trillion-Won National Growth Fund Launches... Construction Stocks Stir Again" [Weekend Money]

Benefiting Advanced Industry Infrastructure Such as Semiconductors, AI, and Data Centers

Virtuous Cycle Expected for Regional Construction Demand Through Balanced Regional Development

There are growing expectations that the "National Growth Fund," which is being launched to secure South Korea’s next-generation growth engines, will become a new breakthrough for the stagnant construction industry.

The National Growth Fund is a policy finance program that will concentrate capital on mega-projects with significant industrial ripple effects. Over the next five years, it will inject a total of 150 trillion won, including 75 trillion won in strategic funds and 75 trillion won in private capital.

"A 150 Trillion-Won Policy Finance Program... The Inflection Point in the Construction Investment Cycle"

On May 17, Ryu Taehwan, a researcher at Eugene Investment & Securities, analyzed, "At a time when private development projects have been significantly reduced, the National Growth Fund is likely to become a new inflection point in the construction investment cycle."

Although the apparent scale of infrastructure finance investment is around 50 trillion won, the actual size could surpass this nominal support figure. Ryu particularly noted that a considerable proportion of direct investment (15 trillion won), indirect investment (35 trillion won), and low-interest loans (50 trillion won) will be linked to manufacturing plants, equipment investments, and industrial infrastructure development. The Advanced Strategic Industry Fund is structured to participate in subordinated loans and Special Purpose Company (SPC) equity investments, thereby inducing senior loans and equity investment from private capital.

Ryu also stated, "Given the increasing power demand and the expansion of industrial complexes centered on advanced manufacturing, future investments in industrial infrastructure are expected to proceed at a much higher level than in the past."

Emerging as a Key Partner in Building Semiconductor and AI Infrastructure

The allocation of funds will focus on mega-projects with significant industrial impact. While the first round of projects last year centered on basic infrastructure such as the Yongin Semiconductor Cluster and offshore wind power, the second round of projects announced last month has expanded to encompass a wide range of advanced industries, including sovereign AI, data centers, and bio-production facilities.

Demand from the industrial field is also becoming more concrete. The main construction phase for Samsung Electronics' P5 (Pyeongtaek Plant 5) is expected to be in full swing in the second half of the year, and the establishment of the Korea-US Strategic Investment Corporation is bringing expanded investment in the United States into view.

Ryu emphasized, "Regional balanced development and nurturing of local industries through mega-projects will lead to job creation and improved living conditions, forming a virtuous cycle that will drive local construction demand in the mid to long term."

He added, "The construction industry’s role as a partner in building national strategic infrastructure is expected to expand, and it will become the primary beneficiary throughout the entire capital deployment process of the National Growth Fund."

This content was produced with the assistance of AI translation services.