Samsung, SK Hynix commit $2 trillion Korean chip expansion

South Korea's two largest semiconductor firms, Samsung Electronics and SK Hynix, have announced a massive, government-backed investment plan worth hundreds of billions of dollars to dramatically expand chip manufacturing and artificial intelligence infrastructure. The multi-year initiative, unveiled this week, aims to double the country's memory chip production capacity within five years and accelerate the construction of new fabrication plants.

The plan involves a total investment of 3,200 trillion won, equivalent to approximately $2.07 trillion. This encompasses a new 800 trillion won semiconductor cluster in the country's southwest region, alongside previously announced projects. The government, spearheaded by President Lee Jae Myung, has pledged to fast-track regulatory approvals to shorten construction timelines by up to 12 years, aiming to bring new production capacity online by 2033 instead of a previously envisioned 2040 timeframe.

The investment is a direct response to soaring global demand for high-bandwidth memory chips, which are essential for advanced AI processors. Samsung and SK Hynix together control nearly 80 percent of this market. Analysts note memory chip...