South Korean President Lee Jae Myung on Monday announced an 800 trillion won ($520 billion) public-private investment plan alongside Samsung Electronics and SK Hynix, aiming to cement the country’s dominance in memory chip manufacturing as AI-driven demand continues to outpace supply.
The plan calls for each company to commit approximately 400 trillion won ($260 billion) toward constructing two fabrication plants each in the country’s southwestern region, a significant departure from both companies’ existing production footprints concentrated around Seoul. An additional 81 trillion won ($53 billion) is earmarked for chip-packaging facilities in central South Korea.
“We must establish the core building blocks of artificial intelligence faster than any other country,” Lee said in a televised address. “Semiconductors, physical AI and AI data centers are the three pillars of our next great leap forward.”
Samsung Chairman Lee Jae-yong identified the city of Gwangju as a likely site for Samsung’s new factories. SK Hynix Chairman Chey Tae-won described the undertaking as one demanding enormous parcels of land alongside reliable supplies of power, water and qualified engineers, noting that assembling SK Hynix’s current semiconductor cluster in Gyeonggi Province took nine years.
The initiative is part of a broader national blueprint that envisions the southeast taking a larger role in producing chip components and materials, the Chungcheong region anchoring advanced packaging operations, and new data center construction spread throughout the country.
Not everyone is convinced the southwest can support world-class chip manufacturing. The semiconductor industry relies heavily on dense ecosystems of suppliers, equipment makers and skilled workers. Physical proximity is a major source of competitiveness, and building a new hub from scratch carries execution risk. Chey acknowledged the challenge, saying that “a chip factory requires massive land, power, water and talent” and warning that SK could be forced to build outside Korea if domestic conditions are insufficient.
The investment comes as semiconductors accounted for 41.2 percent of South Korea’s exports in the first 20 days of June, with chip shipments up 188.4 percent year-on-year. A Reuters poll found exports likely jumped 61 percent in June, the fastest since October 1978, driven primarily by memory chip demand.
South Korea’s minister of trade, industry and resources, Jung-Kwan Kim, said the government would work to shorten the timeline from licensing to construction for the new facilities.
Sources: Samsung SK Hynix $520 billion chip plants South Korea 2026 (Quartz/Yahoo Finance, June 29, 2026); Samsung, SK Hynix to Pour $520B Into New South Korean Chip Hub (GovCon Exec, June 29, 2026)