Samsung and SK Hynix to invest $520 billion in memory chips in South Korea

South Korea's two major technology companies, Samsung Electronics and SK Hynix, are planning new investments in the country totaling over 800 trillion won to respond to the demand for memory chips fueled by artificial intelligence applications. This amount corresponds to approximately $520 billion.

As part of the initiative announced by the South Korean government, the goal is to establish four new memory chip factories in the country's less developed southwestern region. It was stated that the companies will each invest approximately 400 trillion won for the new production hub.

Samsung announced that one of the leading candidates for its new facilities is the city of Gwangju in the southwest of the country. The program is expected not only to increase production capacity but also to contribute to regional development, employment, and the expansion of the industrial ecosystem.

The plan also includes an additional investment of approximately 81 trillion won, or $53 billion, for chip packaging facilities to be built in the central parts of South Korea.

While global demand for memory chips used in artificial intelligence systems has risen rapidly in recent times, supply shortages have pushed prices to record levels. Samsung and SK Hynix executives believe that current investment plans will not be sufficient to meet future demand.

AI spending by U.S. tech giants also supports this trend. It is reported that Microsoft, Meta, Amazon, and Google's parent company Alphabet plan to allocate a total of up to $670 billion for AI-related capital expenditures this year.