South Korea has abundant forest resources capable of supplying the domestic wood demand. Despite the extensive forest resources, there is continued uncertainty about the nature, quantity, and quality of the timber contained in any particular forested area. Additionally, some technical, logistic, and economic challenges act as barriers to the expansion of domestic timber utilization. To overcome these limitations and to enhance the domestic timber utilization in South Korea, this study investigated the optimal location of potential forest industry clusters. The potential forest availability was estimated based on localized allometric equations. The integration of the analytical hierarchy process and GIS modeling, including a supply chain that minimizes transportation costs, allowed the identification of optimal forest industry clusters locations that balanced the economic, environmental, and social dimensions within the forest industry supply chain. The study reveals that the estimated potential forest resources availability presented approximately 1 billion m3, including sawlog (474 million m3) and pulpwood grade (541 million m3). Additionally, 45 percent of the sawlogs and 48 percent of the pup grade wood were produced from the Gangwon and Gyeongsangbuk-do regions. Furthermore, the logistic analysis indicates that ten potential forest industry clusters are best aligned with the optimal socio-economic impacts with minimized timber transportation costs. To identify the optimal size and number of potential forest industry clusters, further studies that consider fixed and variable costs for maintaining the forest industry clusters are required.