South Korea unveiled a sweeping semiconductor and AI strategy Monday, with President Lee Jae Myung announcing more than $576 billion in chip investment anchored by Samsung Electronics (005930) and SK Hynix (000660). Samsung closed down 4.86% and SK Hynix fell 1.68% in Seoul trading. The two chipmakers will invest 800 trillion won ($518.3 billion) to build two new fabrication facilities each in South Korea's southwestern region, with an additional 81 trillion won earmarked for a chip packaging cluster in the Chungcheong area. Lee said South Korea must "secure the core elements of AI faster than any other country."
The plan is part of Lee's "Three Mega Projects for the Great Leap Forward" initiative, targeting semiconductors, AI data centers, and robotics. South Korea also plans to invest 550 trillion won in AI data centers by 2029 and more than 1,000 trillion won by 2035. DRAM output is expected to double within five years. Samsung Chairman Jay Y. Lee confirmed Gwangju as a site for the company's new chip cluster, while SK Hynix Chairman Chey Tae-won said the firm needed more time to finalize a site given the infrastructure requirements.
Samsung and SK Hynix together control roughly 80% of the global high-bandwidth memory market and have a combined market capitalization of approximately $2 trillion. The scale of the plan has raised concerns among analysts, with Morningstar warning that fresh capacity taking two to three years to come online could create oversupply if AI demand tapers once peak capacity arrives.