S&P Global Ratings stated on the 21st that it expects South Korea to invest approximately 1200 trillion won in data center construction by 2035, potentially placing it among the world's leading data center nations. However, S&P also warned of the risk of credit rating downgrades as telecom operators, internet companies, and other participants face massive investment pressures.
In its report, S&P stated that South Korea's data center expansion plan is among the most aggressive in the Asia-Pacific region. S&P projects that South Korea will invest approximately 1800 trillion to 2000 trillion won (approximately US$1.3 trillion to US$1.4 trillion) in semiconductors and data centers alone over the next 10 years, with approximately 1200 trillion won allocated to data center construction. If the plan proceeds smoothly, South Korea is expected to surpass India by 2035, becoming the second-largest data center market in the Asia-Pacific region, after China, with the largest leased IT load capacity.
The problem lies in the massive capital expenditure. S&P estimates that building a 1-gigawatt data center could require up to 70 trillion won in investment. The major participating companies, SK Telecom, KT, NAVER, and GS Group, had a total cash holding of only 17.9 trillion won and operating cash flow of 14.7 trillion won as of 2025, making it impossible to complete the relevant investments solely with internal funds.
From a company perspective, SK Telecom is responsible for 15 GW of the total 18.4 GW expansion plan, facing the greatest financial pressure. S&P estimates that building a 15 GW data center could require up to 1,000 trillion won, while SK Telecom's capital expenditure in 2025 is only 2.3 trillion won, thus necessitating large-scale external capital raising.
