Samsung, SK Hynix To Build Four New Chip Plants As South Korea Unveils $520 Billion AI Push

Samsung Electronics Co., Ltd. (OTC: SSNLF ) and SK Hynix plan to build two new semiconductor fabrication plants each in South Korea as part of a massive national chip manufacturing initiative. $520 Billion AI Push The South Korean government announced on Monday that Samsung and SK Hynix will each build the fabrication sites in the southwest region of the country.

This move is a component of a national project aimed at creating a chip production “ecosystem” valued at 800 trillion won ($520 billion), reported Reuters.

The announcement is part of three new “mega-projects” by the South Korean government and the global chip giants, designed to stimulate growth and establish a stronghold in the AI sector.

Samsung Electronics’ stock was down 3.87%, while SK Hynix was trading 1.35% lower in Seoul on Monday morning amid earlier reports that the tech giants would announce major investment plans of up to $1.3 trillion over the next 10 years.

President Lee Jae-myung, who presided over the public briefing at Cheong Wa Dae, stressed the importance of securing core elements of artificial intelligence faster than other nations, identifying semiconductors, physical AI, and AI data centers as the “triangle axis for this great leap forward,” reported KBS News.

Lee Jae-myung said the Honam region is well-positioned for future development because its abundant electricity, water, renewable energy, and affordable land make it an ideal location for major investments.

He added that, despite being historically overlooked, the region has become an attractive base for large-scale projects, with companies selecting it for three major mega-projects.

Meanwhile, the Gwangju-Jeonnam government would contribute between 5 trillion ($3.23 billion) and 20 trillion won ($12.95 billion) towards the project, the South Korean President said.

The President pledged to appoint a dedicated Blue House official to oversee the project and personally lead the three major mega-projects to ensure their rapid execution.

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The company is set to issue 17.79 million new shares for the ADR listing, with the proceeds to be used to build a chip factory in Yongin and acquire chipmaking equipment.

Earlier this month, SK Hynix surpassed Samsung Electronics to become South Korea’s most valuable company, a spot Samsung had held since 2000.

SK Hynix leads in supplying advanced HBM chips to Nvidia Corp. (NASDAQ: NVDA ), while Samsung is investing heavily to catch up with its domestic competitor’s technology.

Meanwhile, according to last week’s Nikkei Asia report, as AI infrastructure demand stretches Taiwan Semiconductor Manufacturing Co. ‘s (NYSE: TSM ) chipmaking capacity, companies including BYD, Alphabet Inc. ‘s (NASDAQ: GOOG ) (NASDAQ: GOOGL ) Google, Advanced Micro Devices Inc. (NASDAQ: AMD ), and Tesla Inc. (NASDAQ: TSLA ) are increasingly turning to Samsung Electronics for advanced contract chip manufacturing.

Samsung has also seen a sharp rise in inquiries from both existing and prospective customers, including firms in China.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published editors.

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