The world’s two largest memory chip companies plan to invest $518 billion, or around 800 trillion won, to build four memory fabrication plants in southwestern South Korea. The region has historically received little semiconductor investment.
The announcement forms part of South Korea’s national investment plan covering semiconductors, AI data centers and physical AI. The government unveiled the plan during a presidential briefing on Monday attended by the chairmen of Samsung and SK Hynix.
The plan includes $518 billion for four memory chip plants in the southwest and another $52 billion for a high-bandwidth memory packaging hub in the country’s central region.
Korean technology and energy companies, including SK, GS and Naver, will also invest another $356 billion, or 550 trillion won, in AI data centers through 2035.
South Korean technology companies have now committed more than $900 billion to AI infrastructure and the growing demand for chips. The country hopes these investments will strengthen its position as a major global AI player.
Samsung and SK Hynix, alongside US memory chipmaker Micron, are currently benefiting from record demand during the global memory chip shortage known as “RAMageddon.” The rapid expansion of AI infrastructure has contributed to the shortage.
President Jae Myung Lee described semiconductors, physical AI and AI data centers as the three main areas supporting South Korea’s next industrial era. In a televised address on Monday, he said the country must establish itself as an “irreplaceable” industrial power in 2026.
Lee saidexisting semiconductor facilities in Yongin and Pyeongtaek, located south of Seoul, had already reached their limits. He urged companies to accelerate investment in the southwest to distribute AI-related economic activity beyond the capital region.
He also said South Korea must secure sufficient production capacity in advance.
However, Lee rejected media reports claiming the government had pressured companies to make the investments. He reportedly said the companies had made the decisions based on their own assessments.
Lee said the government’s role was to create conditions that would allow companies to invest without losses and with stronger prospects.
Samsung separately announced on Monday that it plans to invest 2,655 trillion won, or around $1.7 trillion, over the next decade.
The company will allocate 425 trillion won to the Honam region in the southwestern part of the Korean Peninsula.
Samsung selected Gwangju, around 300 kilometres south of Seoul, for a new semiconductor plant. The company cited expected incentives involving electricity, water, workforce availability and living conditions as key reasons for the decision.
Samsung also plans to build an AI data center in Haenam, located at the southern end of the peninsula.
The planned spending is comparable with investments by major US technology companies. Alphabet, Amazon, Meta and Microsoft will collectively spend $650 billion on AI infrastructure this year alone, according to Reuters.
SK Group also announced a medium- to long-term investment roadmap worth 2,100 trillion won, or around $1.4 trillion.
The group plans to spend 1,100 trillion won on expanding semiconductor production capacity and another 1,000 trillion won on AI data centers across South Korea.
SK Hynix, the group’s main semiconductor business, will play a central role in expanding chip production. SK Telecom will lead the development of 15 gigawatts of AI data center capacity nationwide.
It remains uncertain whether the companies can fully execute these plans. Semiconductor plants and other advanced technology facilities take years to build and do not follow political or short-term customer demand timelines.
Demand could decline before the new plants become operational, potentially creating excess supply and causing memory chip prices to fall.
For now, companies across the global AI chip supply chain, particularly those requiring large amounts of memory, will closely follow whether South Korea can complete its planned expansion.
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