Samsung and SK Hynix anchor South Korea's $590B chip push

What's the deal? Samsung ElectronicsDealroom has a profile for this one. Try Dealroom →, SK HynixDealroom has a profile for this one. Try Dealroom →, and the South Korean government will invest a combined ₩911tn ($590bn) to build chipmaking facilities across the country.

The pledge is part of President Lee Jae Myung's "Three Mega Projects for the Great Leap Forward," unveiled Monday to boost semiconductors, AI data centres, and robotics.

About ₩800tn will fund four chip plants in the south-western region, where Samsung and SK Hynix will each build two fabrication sites. Another ₩81tn goes to a chip packaging cluster in the central region.

Why now? The AI boom is straining global chip supply, and South Korea's rivals are racing to expand.

"Our competitors are aggressively building semiconductor fabs to meet rapidly growing demand... we must respond swiftly to stay ahead," the government said.

The world's five largest AI companies are expected to spend more than $1tn on data centres in 2025 and 2026. That demand has pushed up memory chip prices for other buyers, including consumer electronics makers.

What could go wrong? The plan spans 15 years, with ₩30tn earmarked for next-generation memory, on-device AI chips, and defence semiconductors.

Such long timelines carry risk: AI demand could cool, or rivals could pull ahead before the new plants come online.

The signal: Memory chips have become a strategic asset in the AI era, and governments are now backing their champions directly.

Samsung and SK Hynix together hold a market capitalisation of roughly $2tn and account for nearly 80% of the global market for high-bandwidth memory chips, which move the vast data AI applications require.

The investment doubles as industrial policy, steering factories into under-developed regions to spread economic growth.