Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Samsung, SK hynix pledge $519 bil. for southwestern chip hub
President Lee Jae Myung joins hands with SK Group Chairman Chey Tae-won, left, and Samsung Electronics Executive Chairman Lee Jae-yong, right, during a public briefing at Cheong Wa Dae in Seoul on the government's megaprojects for artificial intelligence industry development, Monday. The government and the groups unveiled plans to develop a large-scale semiconductor cluster in the nation's southwestern region. Joint Press Corps
By Yi Whan-woo
Korea unveils megaprojects focused on semiconductors, physical AI, data centers
Samsung Electronics and SK hynix will invest 800 trillion won ($519 billion) to establish a semiconductor complex in the country's southwestern region, as part of government-private sector plans to strengthen Korea's position as one of the world's leading semiconductor powerhouses amid a boom in artificial intelligence (AI) industries.
SK Group, GS Group and Naver will also spend 550 trillion won to set up AI data centers to increase the total capacity to 18.4 gigawatts by 2035.
The government, Samsung Electronics, SK Group and other large businesses announced the massive investment plans Monday, as part of the government's three flagship megaprojects focusing on semiconductors, physical AI and AI data centers, designed to meet surging demand for AI infrastructure as the technology reshapes the global industrial landscape.
The projects are also intended to promote high-tech investment across the country's southwestern, central and southeastern regions as part of a broader push for balanced regional development, while relevant plants and infrastructure are currently concentrated around the capital region, such as in southern Gyeonggi Province's Icheon, Pyeongtaek and Yongin.
“Today's AI race is not only a country-to-country competition but also a global battle across multiple fronts,” President Lee Jae Myung said during a public briefing at Cheong Wa Dae, in the presence of business leaders and ministers from corresponding sectors.
He explained that the competition extends far beyond AI models themselves to the semiconductors that power computing and inference, AI data centers that process enormous volumes of data, physical AI that brings AI into the real world and even foundational infrastructure, such as electricity and water, which makes these technologies possible.
Calling the three priorities of semiconductors, physical AI and AI data centers the “three pillars of our next great leap” for Korea's AI ecosystem, Lee said, "The results of the megaprojects will determine Korea’s fate for the next 20 to 30 years.”
As for semiconductors, a new production hub will be built in the southwestern region with an 800 trillion won investment from Samsung Electronics and SK hynix, each building two memory chip fabs, while the central region will become a semiconductor packaging hub and the southeastern regions will focus on materials, parts and equipment.
President Lee Jae Myung bows to Samsung Electronics Executive Chairman Lee Jae-yong, right, during a briefing at Cheong Wa Dae in Seoul on the government's megaprojects for artificial intelligence industry development, Monday. Joint Press Corps
President Lee Jae Myung bows to SK Group Chairman Chey Tae-won, left, during a briefing at Cheong Wa Dae in Seoul on the government's megaprojects for artificial intelligence industry development, Monday. Joint Press Corps
Samsung Electronics Executive Chairman Lee Jae-yong said Gwangju in the southwestern region is the leading candidate for its next semiconductor investment site.
"As investment in our existing semiconductor hubs has accelerated, we need to move up the timeline for preparing a new production base," the Samsung Electronics chairman said, citing Gwangju's advantages in electricity, water supply, workforce availability and infrastructure incentives.
For advanced chip packaging, he said Samsung Electronics will concentrate investment in the central region, including South Chungcheong Province's Cheonan and Onyang, where it plans to expand production of high-bandwidth memory (HBM) chips that require state-of-the-art packaging technology.
The government said it would help Samsung Electronics and SK hynix accelerate the ongoing construction of semiconductor clusters in Yongin and other sites throughout the capital region, in order to double memory chip production capacity within five years.
Additionally, the government will invest more than 30 trillion won over 15 years in next-generation chips and establish a comprehensive support system involving government, industry and academia.
For AI data centers, SK Group, GS Group and Naver will invest 550 trillion won. They aim to establish centers with 8.4 gigawatts of capacity in the initial phase, and expand it to 18.4 gigawatts by 2035.
Including the memory fabs and the data centers, SK Group Chairman Chey Tae-won said the group will invest a total of 1,100 trillion won.
President Lee Jae Myung speaks during a public briefing on the government's three flagship megaprojects on artificial intelligence (AI) industries at Cheong Wa Dae in Seoul, Monday. Yonhap
Alongside the infrastructure buildout, the government will foster an AI data center ecosystem by supporting domestically developed AI chips, power and cooling solutions, and AI data center clusters with large-scale test beds.
It also aims to strengthen cloud computing technologies and AI semiconductor capabilities to boost exports and expand public access to AI services.
Concerning physical AI, Korea aims become one of the world's top three AI robot powers while positioning physical AI as a national strategic industry by 2030.
The plan will accelerate AI use in manufacturing, nurture key technologies such as robot components, train skilled workers and establish regional mass production hubs led by private investment.
Over the next three years, the government aims to develop a world-class domestic physical AI foundation model and expand its use across manufacturing, health care, agriculture, safety and defense, with the goal of commercializing physical AI services and exporting full-stack AI platforms.
The Samsung Electronics chief said the company will focus its investments in physical AI, including humanoid robots and AI data centers for internal use, in Gumi, North Gyeongsang Province.