South Korea announced an 800 trillion won ($518 billion) national semiconductor project, directing Samsung Electronics and SK Hynix to each build two new fabrication plants in the country's southwest as part of a broad AI-era infrastructure push.
South Korea announced an 800 trillion won ($518 billion) national semiconductor ecosystem project on Monday, directing Samsung Electronics and SK Hynix each to build two new fabrication plants in the country's southwest — a sweeping commitment to AI-era chip manufacturing that sent both companies' shares lower on the news.
President Lee Jae Myung framed the initiative as a race against rival nations, saying South Korea must move faster than competitors to secure the technologies underpinning the AI era.
"We will rapidly expand our production capacity by drastically shortening the timeline from licensing to construction," said Jung-Kwan Kim, South Korea's minister of trade, industry and resources, in a statement.
Samsung Electronics shares fell 4.8% on Monday, while SK Hynix erased early losses of nearly 6% to close down 1.6% — a reaction that reflected investor concern over the capital demands of the program rather than any skepticism about the sector's direction.
The announcement follows a report by the Maeil Business Newspaper on Friday that said Samsung Group was preparing a separate, decade-long 1,000 trillion won ($646 billion) investment program spanning semiconductor fabs, AI data centers, advanced packaging, batteries, and displays. That blueprint reportedly includes roughly 300 trillion won for new fabs in southwestern South Korea, 360 trillion won for the Yongin semiconductor cluster, and more than 350 trillion won for AI data centers. The newspaper did not clarify whether those figures overlap with the government's 800 trillion won figure.
Both companies have emerged as central players in the global AI infrastructure buildout. SK Hynix holds the leading position as a supplier of advanced high-bandwidth memory chips to Nvidia, while Samsung has been investing to close the technology gap with its domestic rival.
Demand for HBM chips has consistently outpaced supply as cloud providers and technology firms race to expand AI infrastructure, reinforcing the strategic logic behind large-scale domestic capacity additions.
The scale of the announced spending underscores how governments across Asia are treating semiconductor self-sufficiency as a national security priority, committing public frameworks and industrial policy to anchor chip supply chains at home even as global capital flows toward AI build-outs in the United States and Europe.
Whether Samsung and SK Hynix can execute on this capacity expansion while managing near-term investor concerns about returns will be a central question for the Korean semiconductor sector in the months ahead.
Jay Goldberg is a staff writer at TechEchelon covering technology, markets, and policy. He files the breaking news and deal coverage that move the publication's core desks.
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