SEOUL - MICROSOFT will set up a research and development centre in South Korea in cooperation with the country's leading scientific research institute, officials said on Monday.

The Korea Advanced Institute of Science and Technology (KAIST) said it would sign an initial deal with the US company next month.

'Microsoft's chief research and strategy officer Craig Mundie will visit our institute to sign a memorandum of understanding on Oct 30,' KAIST professor Choi Key-Sun told AFP.

Microsoft is expected to fund the establishment and management of the centre while KAIST will provide staffing, he said, adding that details such as the amount of Microsoft's investment are still being discussed.

During a trip to Seoul in May, Microsoft founder Bill Gates promised to invest US$147 million (S$210.87 million) in South Korea over five years to strengthen his company's presence in the country.

Microsoft also agreed with top automaker Hyundai Motor to set up a strategic alliance and to jointly establish an auto IT innovation centre.