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, a region that has historically attracted few semiconductor investments.
The announcement is part of the country’s comprehensive 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 is divided into three buckets. In the memory chip bucket, there is $518 billion for four new memory manufacturers in the southwest, plus $52 billion for an HBM (high bandwidth memory) packaging hub 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 until 2035.
All told, South Korean tech companies have committed to spending over $900 billion on artificial intelligence and the chip requirements it creates. 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 US memory chip maker Micron) are all enjoying record demand from what has been called RAMageddon, a worldwide shortage of memory chips caused by the AI ​​boom.
“Semiconductors, physical AI and AI data centers are the triple axis of South Korea’s next industrial era,” President Jae Myung Lee said in a televised speech on Monday, calling 2026 the year South Korea will establish itself as an “irreplaceable” industrial power.
Lee said existing chip facilities in Yongin and Pyeongtaek, the heart of South Korea’s semiconductor belt just south of Seoul, have “already reached their limits,” and urged companies to accelerate investment in the southwest, hoping to spread the AI ​​wealth beyond the nation’s capital. “We need to ensure overwhelming production capacity in advance,” he said.
Still, Lee pushed back against media reports that the government had pressured companies to invest, reportedly saying the decisions reflected the companies’ own judgment. “The government’s role is to invest its capacity so that companies can invest without losses and with better prospects,” he was quoted as saying.
Samsung separately issued a press release on Monday 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, about 300 kilometers south of Seoul, for a new semiconductor factory, along with an AI data center in Haenam, on the southern tip of the peninsula.
That’s not an unusual sum compared to US tech giants Alphabet, Amazon, Meta and Microsoft, which together will spend $650 billion on AI infrastructure this year alone, according to Reuters.
Meanwhile, SK Group announced a 2.1 trillion won (~$1.4 trillion) mid- to long-term investment roadmap, 1.1 trillion won to expand semiconductor production capacity and 1.0 trillion won for AI data centers nationwide. SK Hynix, the group’s core semiconductor affiliate, is central to the chip expansion, while SK Telecom will lead the rollout of 15 gigawatts of AI data center capacity across the country.
Whether the ambition translates into execution is another question. Deep-tech industries like semiconductors and artificial intelligence don’t move on political or even customer demand timelines. Fabs take years to build, and the risk is that by the time they’re ready, the demand that caused them will have ebbed, leaving companies with oversupply and crashing prices. For now, the world’s supply chain for AI chips, especially those hungry for all things memory, will be watching to see if South Korea can pull it off.
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