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Parts and materials technology development
Foreign direct investment pledged to Korea rise 43.6% to $5.2 billion in Q3 2020-10-15

The Ministry of Trade, Industry and Energy announced on October 13 that foreign direct investment (FDI) pledged to Korea totaled USD 5.2 billion in the third quarter, posting a year-on-year growth of 43.6%. Cumulative announced FDI inflows this year reached $12.9 billion.

Over the July-September period, the FDI pledges marked the record-high amount for the third quarter as current investors greatly expanded their investment.

Investments in high-tech materials, parts, and research and development (R&D) were prominent. Also, investment inflows in infrastructure and services in the renewable energy sector as part of the Green New Deal drive were noticeable.

Contact-free and digital transformation-related investments in response to the outbreak of COVID-19 continued as well. The bio-health industry represented by COVID-19 diagnostic kits also attracted investment.

By country, FDI pledged from the U.S. to Korea over the first nine months of 2020 fell 23.1 percent to $3.0 billion while that actually arrived decreased 28.1 percent to $633 million.

FDI commitments from the EU (including the United Kingdom) recorded $2.7 billion, down 20.6 percent from a year earlier. Those arrived lost 32.5 percent to $2.3 billion.

Investors from Japan committed $509 million, down 55.0 percent. Their actual investment declined 56.5 percent to $428 million.

Meanwhile, investments pledged from China and other regions (including Hong Kong, Singapore, Taiwan, and Malaysia) jumped 47.8 percent to $4.1 billion and those actually arrived expanded 53.5 percent to $2.4 billion.

By industry, investment pledges to the Korean manufacturing sector went up 9.2 percent to $3.8 billion, but those arrived went down 6.9 percent to $1.6 billion.

FDI pledged to the service sector amounted to $8.9 billion, down 9.5 percent from the year before, while FDI arrived in this industry gained 16.1 percent to $6.3 billion.

By type, greenfield investment pledged to Korea dropped 4.7 percent to $9.3 billion, but that arrived inched up 0.3 percent to $4.4 billion.

For merger and acquisition (M&A) investment, foreign investors pledged $3.6 billion, which is 3.6 percent less compared to the first third quarters of last year. Meanwhile, M&A investment that arrived advanced 2.4 percent to $3.6 billion.

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