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The world\u2019s two largest memory chip companies plan to invest $518 billion (~800 trillion won) to build four new memory fabs in southwestern South Korea, a region that has historically attracted little semiconductor investment.<\/p>\n
The announcement is part of the country\u2019s sweeping national investment plan spanning semiconductors, AI data centers, and physical AI, which was unveiled at a presidential briefing on Monday, with the chairmen of Samsung and SK Hynix in attendance. The plan breaks down into three buckets. In the memory chip bucket is $518 billion for four new memory fabs in the southwest, plus $52 billion for an HBM (high bandwidth memory) packaging hub in the central region. Then there\u2019s another $356 billion (550 trillion won) for AI data centers to be built by Korean tech and energy behemoths such as SK, GS, and Naver through 2035.<\/p>\n
All told, South Korean tech companies have committed to spend over $900 billion on AI and the demands for chips it is creating. With this, the nation hopes to catapult itself into becoming more of an AI power player than it already is. Currently, Samsung and SK Hynix (along with U.S. memory chip maker Micron<\/a>) are all enjoying record demand from what\u2019s been called RAMageddon<\/a>, a worldwide shortage of memory chips caused by the AI buildout.<\/p>\n \u201cSemiconductors, physical AI, and AI data centers are the triple axis for South Korea\u2019s next industrial era,\u201d President Jae Myung Lee said in a televised address<\/a> Monday, calling 2026 the year South Korea must establish itself as an \u201cirreplaceable\u201d industrial power.<\/p>\n Lee said existing chip facilities in Yongin and Pyeongtaek, the heart of South Korea\u2019s semiconductor belt just south of Seoul, have \u201calready reached their limits,\u201d and urged companies to accelerate investment in the southwest, hoping to spread the AI wealth beyond the nation\u2019s capital. \u201cWe must secure overwhelming production capacity in advance,\u201d he said.<\/p>\n Yet, Lee pushed back against media reports that the government had pressured companies into the investments, reportedly saying<\/a> the decisions reflected the companies\u2019 own judgment. \u201cThe government\u2019s role is to invest its capabilities so that companies can invest without losses and with better prospects,\u201d he was quoted as saying.<\/p>\n Samsung separately published a press release Monday<\/a>, announcing 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, workforce, and living conditions as key factors in selecting Gwangju, roughly 300 kilometers south of Seoul, for a new semiconductor fab, alongside an AI data center in Haenam, at the southern tip of the peninsula.<\/p>\n That is not an outlandish sum compared to U.S. tech giants Alphabet, Amazon, Meta, and Microsoft, which will collectively spend $650 billion on AI infrastructure this year alone, according to Reuters<\/a>.<\/p>\n Meanwhile, SK Group announced a 2,100 trillion won (~$1.4 trillion) medium- to long-term investment roadmap, 1,100 trillion won to expand semiconductor production capacity and 1,000 trillion won for AI data centers nationwide. SK Hynix, the group\u2019s core semiconductor affiliate, is central to the chip expansion push, while SK Telecom will lead the buildout of 15 gigawatts of AI data center capacity across the country.<\/p>\n Whether the ambition translates into execution is another question. Deep tech industries like semiconductors and AI don\u2019t move on political or even customer demand timelines. Fabs take years to build and the risk is that, by the time they are ready, the demand that caused them will have ebbed, leaving companies with oversupply and crashing prices. For now, the world\u2019s AI chip supply chain, especially those hungry for all things memory, will be watching to see if South Korea can pull it off.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n