Samsung Electronics and SK Hynix plan to invest about 800 trillion won, or $518 billion, to build four memory chip fabrication plants in southwestern South Korea. The projects form part of a national investment program covering semiconductors, AI data centers and physical AI.
Each company will build two fabs in the region, which has received less semiconductor investment than the established production areas around Yongin and Pyeongtaek. South Korea also plans an 81 trillion won, or roughly $52 billion, high-bandwidth memory packaging hub in the central Chungcheong region.
President Lee Jae Myung announced the program during a televised briefing attended by Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won. Lee described semiconductors, physical AI and AI data centers as the three main areas supporting South Korea’s next phase of industrial development.
He said existing semiconductor facilities near Seoul were reaching their limits and called for production capacity to expand into the southwest. Lee also rejected reports that the government had pressured the companies, saying the investment decisions reflected their own assessments.
Samsung and SK Detail Larger Investment Plans
Samsung Electronics separately announced plans to invest 2,655 trillion won in South Korea over the coming years. Its official announcement allocates 425 trillion won to the Honam region, including 400 trillion won for semiconductor development.
Samsung plans to build two new fabs in Gwangju and establish an AI data center in Haenam through Samsung SDS. The company cited access to electricity, water, workers and local infrastructure support as factors behind its selection of the region.
SK Group outlined a 2,100 trillion won investment roadmap covering semiconductors and AI infrastructure. SK Hynix is expected to direct 1,100 trillion won toward semiconductor capacity, while SK Telecom will lead plans for as much as 15 gigawatts of AI data-center capacity nationwide.
AI Data Centers Add to Power and Chip Demand
South Korean companies, including SK, GS and Naver, also plan to invest 550 trillion won in AI data centers. Total spending on those facilities could exceed 1,000 trillion won by 2035 as capacity expands beyond the Seoul region.
The investment comes as Samsung, SK Hynix and Micron face strong demand for memory chips used in AI servers. High-bandwidth memory has become especially important because AI accelerators require large amounts of fast memory to process data.
The new fabs will take years to construct and begin production. Semiconductor projects also require substantial supplies of electricity and water, while future demand conditions could affect the pace and final scale of the investments.
Featured image credits: Roboflow Universe – engsaikan
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