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Samsung, SK Hynix Pledge $519 Billion For Southwestern Chip Hub As Korea Unveils AI Megaprojects
Samsung and SK Hynix will invest 800 trillion won ($519 billion) to establish a semiconductor complex in South Korea's southwestern region, as part of government-private sector plans to strengthen the country's position as one of the world's leading semiconductor powerhouses amid a boom in artificial intelligence (AI) industries, according to a report by The Korea Times. SK Group, GS Group and Naver will also spend 550 trillion won to set up AI data centres, with the aim of increasing total capacity to 18.4 gigawatts by 2035.Three flagship megaprojects unveiledThe South Korean government, Samsung Electronics, SK Group and other large businesses announced the massive investment plans on Monday, as part of the government's three flagship megaprojects focusing on semiconductors, physical AI and AI data centres, designed to meet surging demand for AI infrastructure as the technology reshapes the global industrial landscape, The Korea Times reported.Samsung Chip Workers Set For Massive Bonuses As AI Boom Fuels 49-Fold Profit Surge; Each Employee To Get ₹3.25 CroreThe projects are also intended to promote high-tech investment across the country's southwestern, central and southeastern regions as part of a broader push for balanced regional development, while relevant plants and infrastructure are currently concentrated around the capital region, such as in southern Gyeonggi Province's Icheon, Pyeongtaek and Yongin.President Lee Jae Myung on the stakes of the AI raceSpeaking during a public briefing at Cheong Wa Dae, in the presence of business leaders and ministers from corresponding sectors, President Lee Jae Myung said, "Today's AI race is not only a country-to-country competition but also a global battle across multiple fronts."He explained that the competition extends far beyond AI models themselves to the semiconductors that power computing and inference, AI data centers that process enormous volumes of data, physical AI that brings AI into the real world and even foundational infrastructure, such as electricity and water, which makes these technologies possible.Calling the three priorities of semiconductors, physical AI and AI data centres the 'three pillars of our next great leap' for Korea's AI ecosystem, Lee said, "The results of the megaprojects will determine Korea's fate for the next 20 to 30 years."SK hynix Overtakes Samsung Electronics In Market Capitalisation For 1st Time As AI Memory Chip Demand SurgesThe new semiconductor hubAs for semiconductors, a new production hub will be built in the southwestern region with an 800 trillion won investment from Samsung Electronics and SK hynix, each building two memory chip fabs, while the central region will become a semiconductor packaging hub and the southeastern regions will focus on materials, parts and equipment.Samsung Electronics Executive Chairman Lee Jae-yong said Gwangju in the southwestern region is the leading candidate for its next semiconductor investment site. "As investment in our existing semiconductor hubs has accelerated, we need to move up the timeline for preparing a new production base," the Samsung Electronics chairman said, citing Gwangju's advantages in electricity, water supply, workforce availability and infrastructure incentives.For advanced chip packaging, he said Samsung Electronics will concentrate investment in the central region, including South Chungcheong Province's Cheonan and Onyang, where it plans to expand production of high-bandwidth memory (HBM) chips that require state-of-the-art packaging technology.The government said it would help Samsung Electronics and SK Hynix accelerate the ongoing construction of semiconductor clusters in Yongin and other sites throughout the capital region, in order to double memory chip production capacity within five years. Additionally, the government will invest more than 30 trillion won over 15 years in next-generation chips and establish a comprehensive support system involving government, industry and academia.Nvidia & SK hynix Forge Multi-Year Partnership To Advance Next-Gen AI Memory For AI Factories & Vera RubinAI data centre expansion led by SK, GS and NaverFor AI data centers, SK Group, GS Group and Naver will invest 550 trillion won, aiming to establish centers with 8.4 gigawatts of capacity in the initial phase, and expand it to 18.4 gigawatts by 2035. Including the memory fabs and the data centres, SK Group Chairman Chey Tae-won said the group will invest a total of 1,100 trillion won.Alongside the infrastructure buildout, the government will foster an AI data center ecosystem by supporting domestically developed AI chips, power and cooling solutions, and AI data center clusters with large-scale test beds. It also aims to strengthen cloud computing technologies and AI semiconductor capabilities to boost exports and expand public access to AI services.Physical AI as a national strategic industryConcerning physical AI, Korea aims to become one of the world's top three AI robot powers while positioning physical AI as a national strategic industry by 2030. The plan will accelerate AI use in manufacturing, nurture key technologies such as robot components, train skilled workers and establish regional mass production hubs led by private investment.Over the next three years, the government aims to develop a world-class domestic physical AI foundation model and expand its use across manufacturing, health care, agriculture, safety and defense, with the goal of commercializing physical AI services and exporting full-stack AI platforms. The Samsung Electronics chief said the company will focus its investments in physical AI, including humanoid robots and AI data centers for internal use, in Gumi, North Gyeongsang Province.
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