National Growth Fund Announces Second Mega Project... Investments in Bio, Display, and More

The National Growth Fund has selected bio, display, and next-generation mobility as target sectors for its second mega project. According to the financial authorities, the joint public-private fund of 35 trillion won will be subdivided into around 20 sub-funds, with a focus on addressing investment blind spots across industries that have not received sufficient private capital.

On the 17th, at the Press Center in Jung-gu, Seoul, attendees including Eokwon Lee, Chairman of the Financial Services Commission, Kyunghoon Bae, Deputy Prime Minister and Minister of Science and ICT, Sangjin Park, Chairman of the Korea Development Bank, and representatives of five AI semiconductor companies participated in a commemorative photo during the public-private joint meeting for the National Growth Fund 'K-NVIDIA Project'. March 17, 2026 Photo by Yongjun Cho

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On April 14, the Financial Services Commission held the '2nd Strategy Committee for the National Growth Fund' and discussed the second mega project, which includes these plans, as well as ways to further support the advanced industry ecosystem.

In his opening remarks, Lee Eogwon, Chairman of the Financial Services Commission, said, "The National Growth Fund has taken its first step as patient capital to drive the growth of Korea's advanced strategic industries. Today's discussion on the second mega project and strategies for supporting the advanced industrial ecosystem is to proactively respond to urgent funding needs."

The newly announced second mega project expands the investment scope beyond the previous focus on semiconductors to include industries projected to be Korea's future growth engines, such as bio, display, mobility, artificial intelligence (AI), and energy. Specifically, the plans include support for phase 3 clinical-stage bio and vaccine companies and contract development and manufacturing organizations (CDMOs); investments to maintain a technological edge in OLED facilities; fostering drone-based mobility and defense industries; establishing a sovereign AI ecosystem; expanding AI data center infrastructure linked to renewable energy; and forming an advanced industry belt in Saemangeum.

The total investment for the second mega project is expected to be around 10 trillion won, similar in size to the first phase (11 trillion won). According to the Financial Services Commission, individual projects will receive between several tens of billions to several hundreds of billions of won, with some facility investment projects potentially receiving funds in the trillion-won range. While the exact number of target companies has not been determined, it is expected to include multiple firms, such as three to four in bio, two in renewable energy, and one in the unmanned aerial vehicle sector.

The joint public-private fund will be segmented into scaling-up funds, ultra-long-term technology funds, M&A funds, and regional funds to address funding blind spots. To this end, a dedicated scaling-up fund capable of investments in the hundreds of billions of won per case and a technology investment fund supporting long-term investments of over 10 years will be established. These will provide large-scale growth capital to promising companies and long-term capital to deep-tech firms. Additionally, the fund will focus on supporting pre-IPO and early-stage KOSDAQ-listed companies, and will establish M&A and business restructuring funds to create a virtuous investment cycle of investment, exit, and reinvestment.

Furthermore, a regional fund of over 200 billion won will be created annually, with at least 60% to be invested in local companies. Priority will be given in the selection process to management firms based in the regions with close local knowledge, thereby strengthening support for regional advanced industry ecosystems.

Eokwon Lee, Chairman of the Financial Services Commission, is attending the 'National Growth Fund Strategy Committee Meeting' held at the Korea Development Bank in Yeouido, Seoul on the 11th, delivering an opening remark. 2025.12.11 Photo by Dongju Yoon

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The investment approach and fund manager selection criteria will be comprehensively overhauled. The focus will be on tangible experience in increasing enterprise value after investment, or on records of providing follow-on growth capital after initial investment. Opportunities will also be provided to management firms that have never received policy funding before, thereby leveraging new investment perspectives and networks. In addition, the entrepreneurial experience of fund managers in advanced strategic industries will be taken into account, building a system where even failure experience can be considered an asset.

Kang Seongho, Director of the National Growth Fund at the Financial Services Commission, said, "We plan to move away from a profit-focused evaluation and instead comprehensively assess expertise in advanced industries, entrepreneurial experience, and investment strategies. We will also actively select management firms with no prior collaboration experience."

The government plans to utilize direct investments totaling 15 trillion won as strategic assets focused on large-scale, long-term investments, providing billions of won in facility and mass-production capital to advanced companies with global competitiveness. Just as it invested 640 billion won (including 250 billion won from advanced funds) in AI semiconductor company Rebellions, the government will actively identify and support not only 'K-Nvidia' but also a wide range of promising companies.

Moreover, the deal sourcing system will be revamped to diversify beyond the Korea Development Bank and the five major financial holding companies, which have traditionally led this area. This is to address the issue of companies with strong technological capabilities but weak short-term performance being excluded due to a focus on financial indicators and collateral. Accordingly, promising companies fostered by private venture capital (VC), private equity funds (PEF), and government ministries will be selected and linked to large-scale follow-on investments. To this end, a 'Growth Company Discovery Council' will be established within the National Growth Fund task force to strengthen investment linkages for companies discovered and fostered by both the private and public sectors.

In addition, for high-risk projects and areas requiring long-term investment, public funds will take on a subordinated loss-absorbing role, thereby encouraging the inflow of private capital and strengthening the fund's priming function.

The Financial Services Commission will also expand support for small and medium-sized enterprises (SMEs) and mid-sized companies through low-interest loans, spreading a win-win model in which supply chain companies participate in large-scale projects led by major corporations. This will involve various methods, such as project funds, establishing special purpose companies (SPCs), and launching special financial support programs linked to low-interest loans for large corporations. The commission also plans to continuously expand exemplary cases, such as Samsung Electronics' 200 billion-won win-win program. For local SMEs and mid-sized firms, the current investment review system will be maintained, but a faster support process will be introduced to more quickly respond to investment demand.

The Financial Services Commission plans to select joint public-private fund managers in the second quarter, raise funds in the second half of the year, and begin full-scale investments as early as the end of the year. Direct investments and loans will continue to be provided as needed to meet industrial demand.

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