South Korea’s two memory chip giants are betting big on the country’s underdeveloped southwest region. Samsung Electronics and SK Hynix said Monday they will invest a combined 800 trillion won ($518 billion) to build a new semiconductor manufacturing hub there, marking one of the largest industrial buildouts in the country’s history.
The plan, announced alongside President Lee Jae Myung, calls for each company to construct two fabrication plants in the southwest — a significant geographic pivot for an industry that has long been concentrated in Gyeonggi Province, just south of Seoul. Samsung’s new fabs will be built in Gwangju, where officials are evaluating several potential sites including the grounds of a military air base slated for relocation.
The investment dovetails with the government’s push to spread economic development beyond the greater Seoul metropolitan area. The southwest has historically trailed the rest of the country industrially, and the region is a political stronghold for Lee’s liberal Democratic Party. The president cast the project as essential to South Korea’s competitiveness in the AI era, arguing the country must move faster than rivals to lock down the technologies driving the next wave of computing.
“We will rapidly expand our production capacity by drastically shortening the timeline from licensing to construction,” said Jung-Kwan Kim, South Korea’s minister of trade, industry and resources.
SK Hynix Chairman Chey Tae-won was more measured, describing the project as a complex, large-scale effort that would require “vast sites, along with sufficient power, water and skilled workers.” He noted that it took nine years for SK Hynix to establish its existing manufacturing cluster in Gyeonggi Province. Still, he acknowledged that a significant capacity expansion is necessary to keep pace with global demand, particularly for high-bandwidth memory chips used in AI accelerators.
The two companies together produce roughly two-thirds of the world’s memory chips. SK Hynix is currently the leading supplier of advanced HBM to Nvidia, while Samsung has been investing heavily to close the technology gap with its domestic rival. The new fabs are expected to produce both conventional memory and advanced HBM stacks tailored for AI workloads.
The announcement follows a separate report that Samsung Group is preparing a 1,000 trillion won ($646 billion) ten-year investment blueprint spanning semiconductor fabs, AI data centers, advanced packaging, batteries, and displays — though the two figures may overlap. Market reaction was mixed: Samsung Electronics shares fell 4.8 percent on the day, while SK Hynix closed down 1.6 percent.
The companies did not specify timelines for completing the new facilities. Samsung Chairman Lee Jae-yong said the Gwangju complex would be developed in phases, with initial construction dependent on regulatory approvals and infrastructure buildout. The project is expected to create tens of thousands of jobs and draw a network of suppliers and equipment makers to the region, gradually transforming the southwest into a full semiconductor and AI ecosystem.
