Two of the world’s 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.
The announcement is part of the country’s sweeping investment plan that includes semiconductors, AI data centers, and Physical AI, which was presented at a presidential press conference on Monday, with the chairmen of Samsung and SK Hynix in attendance. The plan is divided into three buckets. In the memory chip bucket is 518 billion dollars for four new memory devices in the southwest, and 52 billion dollars for the HBM packaging hub (high bandwidth memory) in the central region. Then there’s another $356 billion (550 trillion won) for AI data centers to be built by Korean tech behemoths and powerhouses like SK, GS and Naver until 2035.
In total, South Korean tech companies have committed to spending more than $900 billion on AI and the chips that build them. With this, the nation hopes to strive to become an AI power player even more than it already is. Currently, Samsung and SK Hynix (as well as US memory chip maker Micron) are all enjoying record demand in the so-called RAMageddon, a global shortage of memory chips caused by AI.
“Semiconductors, AI data centers, and AI are the triple axis of South Korea’s next industrial era,” President Jae Myung Lee said in a televised address on Monday, calling 2026 the year South Korea should establish itself as an “irreplaceable” industrial power.
Lee said existing facilities in Yongin and Pyeongtaek, the heart of South Korea’s semiconductor belt south of Seoul, have “reached their limit,” and urged companies to accelerate investment in the southwest, hoping to spread the wealth of AI beyond the nation’s capital. “We have to secure the maximum production capacity in advance,” he said.
However, Lee dismissed media reports that the government pressured companies to invest, reportedly saying that the decisions reflected the companies’ judgment. “The government’s role is to invest its power so that companies can invest without losses and have better prospects,” he was quoted as saying.
Samsung separately published a press release on Monday, announcing plans to invest 2,655 billion won (~$1.7 trillion) over the next decade, with 425 trillion won earmarked for the Honam region, in the southwestern corner of the Korean peninsula. The company pointed to the expected incentives in terms of energy, water, labor, and living conditions as important factors in choosing Gwangju, about 300 kilometers south of Seoul, for the new semiconductor fabric, near the AI data center in Haenam, on the southern tip of the peninsula.
That’s not an outrageous sum compared to US giants Alphabet, Amazon, Meta, and Microsoft, which will spend $650 billion on AI infrastructure this year alone, according to Reuters.
Meanwhile, SK Group announced a 2,100 trillion won (~$1.4 trillion) medium- to long-term investment road, 1,100 trillion won to expand semiconductor production capacity and 1,000 trillion won for AI data centers nationwide. SK Hynix, the group’s main semiconductor company, is at the center of the chip expansion, while SK Telecom will lead the construction of 15 gigawatts of AI data center capacity nationwide.
Whether desire translates into execution is another question. Deep technology industries like semiconductors and AI don’t run on politics or on the timeline of customer demand. Fabrics take years to develop and the danger is that, by the time they are ready, the demand that created them will have subsided, leaving companies with excess cash and prices. Meanwhile, the world’s 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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