South Korea to invest $576 billion in AI chip production with Samsung and SK Hynix
Reuters —
South Korea rolled out sweeping chip and AI mega-projects on Monday, as President Lee Jae Myung pledged to cement overwhelming industry leadership with investments worth more than $576 billion over several years.
The announcement marks Lee’s boldest push yet to align South Korea’s AI and chip ambitions with his pledge to narrow regional disparities and revive economies beyond the Seoul metropolitan area.
Lee was joined by the leaders of Samsung Electronics and SK Hynix, the world’s two largest memory chipmakers, for the televised announcement.
The president said,
We must secure the core elements of AI faster than any other country,
“Semiconductors, physical AI, and AI data centres are the triple axis for our great leap forward.”
Samsung and SK Hynix will invest 800 trillion won ($517.87 billion) with suppliers to build two new chip fabrication sites each in South Korea’s southwest region, he said.
Lee said the country’s southwestern city of Gwangju and South Jeolla province will also invest 5-20 trillion won in the projects, with a further 81 trillion won expected for a chip packaging cluster in the Chungcheong area near Seoul.
Lee said the southwest will host major chip production clusters, drawing on abundant, underused power.
He said,
To meet the rapidly increasing demand for semiconductors, we need to quickly complete the production hubs that are currently under construction,
“At the same time, we must secure overwhelming production capacity in advance through large-scale new investments, including in the southwestern region. Existing sites centred around Yongin and Pyeongtaek have already reached their limits.”
High-bandwidth memory chips produced by Samsung Electronics and SK Hynix have become pivotal in the global race to build advanced AI systems. Both companies already operate major semiconductor facilities in and around the Seoul metropolitan area.
Industry experts say diversifying chip investment beyond Seoul could ease infrastructure bottlenecks, but warn that building cutting-edge fabs requires vast electricity and water, advanced logistics, deep supplier networks and highly skilled labour – elements that may not scale quickly enough in a new region to meet surging AI demand.
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South Korea to invest $576 billion in AI chip production with Samsung and SK Hynix, source
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