South Korea has announced a comprehensive industrial strategy focused on semiconductor chips and artificial intelligence, backed by significant investments from major companies. Samsung Electronics and SK Hynix plan to invest a combined 800 trillion won ($518 billion) to build a new computer chipmaking hub in the country's southwest region, according to multiple sources.
Key Investment Details
Samsung Electronics and SK Hynix, with suppliers, will invest 800 trillion won ($518 billion) to construct two new chip fabrication sites in South Korea's southwest. Each company will build two fabrication plants in the region, expanding beyond their existing complexes in Gyeonggi Province. Samsung's new facilities will be located in Gwangju, with potential sites including grounds of a military air base slated for relocation. Completion timelines were not specified. SK Hynix Chairman Chey Tae-won noted that establishing its Gyeonggi cluster took nine years.
Additional investments include:
- 550 trillion won ($356 billion) from SK Group, GS Group, and Naver for AI data centers in the region
- 5-20 trillion won in Gwangju and South Jeolla province
- 81 trillion won for a chip-packaging cluster in the Chungcheong area
Science Minister Bae Kyung-hoon announced that by 2035, an additional 10-gigawatt AI data center will be built, with total investment exceeding 18.4 gigawatts and 1,000 trillion won ($648 billion).
Government Context
President Lee Jae Myung attended the announcement, which aligns with government efforts to expand investment outside the greater Seoul metropolitan area. The southwest region has historically lacked major industrial hubs and lagged in economic development.
Government officials outlined a nationwide semiconductor ecosystem: existing southeast hubs will expand component and materials production, the central Chungcheong region will specialize in chip packaging, and data centers will be built across the country.
Statements
"We must establish the core building blocks of artificial intelligence faster than any other country. Semiconductors, physical AI and AI data centers are the three pillars of our next great leap forward."
— President Lee Jae Myung
SK Hynix Chairman Chey Tae-won stated the project requires "vast sites, along with sufficient power, water and skilled workers" and added that significant expansion is needed to keep up with global demand.
Government officials dismissed concerns about resource availability, stating the region's strength in renewable energy would give chipmakers an edge.
Background
Samsung and SK Hynix together produce about two-thirds of the world's memory chips. Both companies have reported record profits recently due to surging demand from AI-driven data centers and infrastructure.
Political Response
The opposition criticized the plan, arguing that locating a semiconductor cluster in Honam, a traditional stronghold of the ruling Democratic Party, is politically motivated. President Lee defended the decision, citing untapped power resources in the region, and rejected claims of favoritism in a series of social media posts.