Samsung, SK hynix say Yongin won't be enough for AI era

Samsung and SK hynix reaffirmed plans to invest about 800 trillion won ($518 billion) to build new semiconductor fabs and AI data centers in Korea's southwest, citing surging AI-driven memory demand. The companies argued that the existing Yongin cluster alone will not meet future global demand, calling for government support on power and water infrastructure.

Chipmakers reaffirm W800 trillion investment plans for new memory fabs, AI infrastructure in Korea's southwest Samsung Electronics and SK hynix on Tuesday reaffirmed plans to invest about 800 trillion won $518 billion to turn Korea's southwest into the country's next semiconductor hub beyond Yongin, citing surging AI-driven memory demand. Samsung Vice Chairman Jun Young-hyun and SK hynix Chief Executive Officer Kwak Noh-jung laid out their investment road maps at a government-hosted event at the Kimdaejung Convention Center in Gwangju, a day after the government and major companies unveiled three megaprojects aimed at strengthening Korea's industrial competitiveness. At the center of Samsung's plan is a new chipmaking base in Gwangju. Jun said the company had reviewed several locations before selecting the city because of its access to power, water, talent and residential infrastructure. "After the Yongin national semiconductor industrial complex, the time is approaching faster than expected for us to prepare the next complex," Jun said. Samsung plans to build two major semiconductor fabs in Gwangju with investment totalling 425 trillion won, including 400 trillion won earmarked for the fabrication plants themselves. Samsung SDS will also invest about 17 trillion won to build a national AI data center in Solaseado in Haenam, positioning the facility as a key pillar of Korea's AI computing infrastructure. Construction is scheduled to begin in the second half the year, with initial operations targeted for 2028. SK Group is investing about 470 trillion won to build two memory fabs and a 1-gigawatt AI data center in the southwest, establishing a new production base to meet surging AI-era memory demand. "The Yongin semiconductor cluster alone will not be enough to meet future global demand," Kwak said. "In the AI era, memory is not just a component but core infrastructure that determines AI performance itself." Kwak said the southwest offers large tracts of land and stable access to power and water, making it well suited for new memory production facilities. SK Group also plans to expand AI data center infrastructure nationwide, starting with 5 gigawatts of capacity and eventually building a 15-gigawatt network across the country. In the southwest, a 1-gigawatt data center is planned to create an AI ecosystem linking chip production with computing infrastructure, the company said. SK hynix also signed a memorandum of understanding with the government and related agencies to support advanced industry development in the southwest. At the event, Amkor Technology announced plans to invest 1 trillion won to expand its advanced packaging facility in Gwangju, further strengthening the region's semiconductor ecosystem. Chipmakers stressed that the success of the investments would depend heavily on stable power and water supplies, calling for stronger government support. Semiconductor plants are among the most power- and water-intensive industrial facilities, and even brief disruptions can result in enormous losses. Jun called for expanded nuclear power generation to offset the intermittency of renewable energy, more long-term power purchase agreements and additional LNG combined heat and power plants. "Large-scale investment plans have limits if pursued by individual companies alone," Jun said, calling for government-wide cooperation in securing land and power infrastructure. President Lee Jae Myung is scheduled to hold additional regional industry vision events in Asan on Thursday and in Jinju on Friday. Samsung, SK hynix and Celltrion are expected to join the Chungcheong event, while Samsung, SK Telecom, Hyundai Motor Company and Hanwha Group are set to participate in the Yeongnam event. herim@heraldcorp.com