Pohang Plans $550 Billion Won AI Data Center, Aiming to Become Asia’s Next Computing Hub
May 17, 2026
Pohang Plans $550 Billion Won AI Data Center, Aiming to Become Asia’s Next Computing Hub
The South Korean city of Pohang is positioning itself as a major artificial intelligence hub with the announcement of a 550 billion won ($430 million) data center project, leveraging its abundant power infrastructure and strategic location near nuclear generation. The facility, set to break ground next month, represents a significant bet on the region’s ability to attract large-scale AI computing demand.
The AI data center will be built on a 100,000-square-meter site within the Gwangmyeong General Industrial Complex in Ocheon-eup, Nam-gu, Pohang, with a total capacity of 40 megawatts. Once operational, the facility will be capable of housing approximately 20,000 high-performance graphics processing units (GPUs), making it one of the most powerful computing clusters in the non-capital region. Hyundai Engineering & Construction has been selected as the preferred bidder, and commercial operations are expected to begin by October 2027, assuming construction proceeds on schedule.
According to Kim Cheol-seung, CEO of AI Factory Pohang PFV, the project’s management company, the city’s proximity to power generation is a key competitive advantage. “By global standards, an AI data center is considered optimally located when it is within 50 kilometers of a power source. Pohang is about 38 kilometers from the Wolseong nuclear power plant in Gyeongju, ensuring stable power supply,” Kim said. He added that the large-scale substation infrastructure already established as a steel industry hub further strengthens the site’s viability.
The project has already secured early demand commitments from a major domestic cloud company for 50% of its total capacity, providing a solid foundation for financial procurement. Forest Partners participated as the lead investor with 120 billion won. “We determined that the project has sufficient business viability to absorb the rapidly growing AI computing demand not only in Korea but across Asia,” a Forest Partners official said.
Public sector support has also been instrumental. North Gyeongsang Province linked the Regional Revitalization Investment Fund and the National Growth Fund to support investment structure design from the early stages, with both funds participating as major investors. Once a differentiated electricity rate system—which applies lower rates to areas near power plants—is introduced, electricity costs are projected to fall by more than 20% compared with the capital region. “Once the differentiated electricity rate system is implemented, the competitiveness of the Pohang data center will rise even further,” said Hong In-ki, head of the Economic Innovation Promotion Team at North Gyeongsang Province.
The industry expects the project to capture early-mover advantages, running more than two years ahead of competing non-capital-region data centers. Looking ahead, North Gyeongsang Province and Pohang City are also pursuing a second-phase 260-megawatt project, which will require approximately 2 trillion won in investment. A power impact assessment has already been submitted to Korea Electric Power Corp., and the goal is to secure demand from global Big Tech companies in the second half of this year and break ground in the first half of 2027. Once both the first and second phases are completed, Korea’s largest AI data center cluster, with a total capacity of 300 megawatts, will be located in Pohang.
Source: sedaily
