The world’s two largest memory chip companies plan to invest $518 billion (~800 trillion won) to build four new memory factories in southwestern South Korea, an area that has historically attracted little investment in semiconductors.
The announcement is part of the country’s sweeping national investment plan covering semiconductors, artificial intelligence data centers and natural artificial intelligence, which was unveiled at a presidential briefing on Monday, attended by the presidents of Samsung and SK Hynix. The plan is divided into three buckets. In the memory chip bin is $518 billion for four new memory units in the southwest, plus $52 billion for an HBM (high bandwidth memory) packaging node in the central region. Then there’s another $356 billion (550 trillion won) for AI data centers to be built by Korean tech and energy giants like SK, GS and Naver by 2035.
In total, South Korean tech companies have committed to spending more than $900 billion on artificial intelligence and the chip requirements it creates. With this, the nation hopes to catapult itself into becoming a stronger AI player than it already is. Currently, Samsung and SK Hynix (along with US memory chip maker Micron) are enjoying record demand from what is being called RAMageddon, a global shortage of memory chips caused by the creation of AI.
“Semiconductors, natural artificial intelligence and artificial intelligence data centers are the triple axis for South Korea’s next industrial era,” said President Jae Myung Lee. in a televised sermon Monday, calling 2026 the year South Korea must establish itself as an “irreplaceable” industrial power.
Lee said existing chip facilities in Yongin and Pyeongtaek, the heart of South Korea’s semiconductor belt south of Seoul, had “already reached their limits” and urged companies to accelerate investment in the southwest, hoping to spread the wealth of artificial intelligence beyond the nation’s capital. “We need to secure overwhelming production capacity in advance,” he said.
However, Lee disputed media reports that the government pressured companies into investing, he is reported to say the decisions reflected the judgment of the companies themselves. “The government’s role is to invest its capabilities so that companies can invest without losses and with better prospects,” he was quoted as saying.
Samsung issued a separate press release on Mondayannouncing plans to invest 2.655 trillion won (~$1.7 trillion) over the next decade, with 425 trillion won earmarked for the Honam region, the southwestern corner of the Korean peninsula. The company cited expected incentives around power, water, labor and living conditions as key factors in choosing Gwangju, about 300km south of Seoul, for a new semiconductor factory, alongside an AI data center in Haenam, on the southern tip of the peninsula.
That’s not an outlandish amount compared to US tech giants Alphabet, Amazon, Meta and Microsoft, who will spend a combined $650 billion on AI infrastructure this year alone. according to Reuters.
Meanwhile, SK Group announced a medium-to-long-term investment map of 2.1 trillion won (~$1.4 trillion), 1.1 trillion won for semiconductor production capacity expansion and 1.0 trillion won for nationwide AI data centers. SK Hynix, the group’s core semiconductor subsidiary, is central to the chip expansion push, while SK Telecom will lead the creation of 15 gigawatts of AI data center capacity across the country.
Whether ambition translates into execution is another question. Deep technology industries like semiconductors and artificial intelligence don’t operate on policies or even customer demand timelines. Factories take years to build, and the risk is that by the time they’re ready, the demand that created them will have subsided, leaving companies with oversupply and falling prices. For now, the global AI chip supply chain, especially those hungry for all things memory, will be watching to see if South Korea can pull it off.
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