Samsung Electronics and SK Hynix will invest €518bn with government backing to build chipmaking plants in less-developed regions,
According to the Financial Times, the promises sit inside Lee’s “Three Mega Projects for the Great Leap Forward”, a plan to bulk up semiconductors, AI data centres and robotics.
It is meant to drag growth away from Seoul, where South Korea’s economy and chipmaking muscle have been parked for decades.
Samsung and SK Hynix have major fabs near the capital, which makes the south-western push more than a bit political.
President Lee Jae Myung said South Korea is “at a turning point for a new great leap forward.”
Samsung and SK Hynix will each build two chipmaking plants in the south-western region, with Won800tn ($518bn, about €454bn) earmarked for the lot.
Another Won81tn ($52bn, about €46bn) will go into a chip-packaging cluster in the central region.
South Korea will spend Won30tn ($19bn, about €17bn) across 15 years on next-generation memory, on-device AI chips, AI server chips and defence semiconductors.
Samsung shares dropped 4.7 per cent on Monday, while SK Hynix fell 2.7 per cent, because investors can still smell oversupply.
The country’s chipmakers are scrambling to feed data centres powering chatbots and other AI baubles.
The five biggest AI outfits are expected to burn through more than $1tn on data centres across 2025 and 2026. That demand has pushed up memory prices for other customers, including consumer electronics makers.
Last week, the Fruity Cargo Cult Apple raised MacBook and iPad prices, blaming “unsustainable” memory and storage costs.
Samsung and SK Hynix now have a combined market capitalisation of about $2tn.
Together, they control nearly 80 per cent of the global high-bandwidth memory market, which keeps AI systems stuffed with data. Lee has been trying to protect South Korea’s tech edge while Samsung and SK Hynix build new plants in the US.
Seoul said on Monday that South Korea’s DRAM production capacity should double within five years.
Morningstar analyst Jing Jie Yu warned that these mega projects could leave the industry drowning in chips if AI spending cools.
“Demand outpaces supply initially as fresh capacity takes two to three years at the minimum to come online,” Yu said in a note.
He added that this often flips into oversupply when peak capacity arrives just as demand starts to taper.
