Samsung, SK hynix to build HBM packaging fabs in Chungcheong region as part of $252.5 bil. in total investment

An artist's rendering of SK hynix's P&T7 packaging fab in Cheongju, North Chungcheong Province / Courtesy of SK hynix

An industrywide 392 trillion-won ($252.5 bil.) investment will be injected into the central Chungcheong area, including high bandwidth memory (HBM) fabs and packaging facilities by Samsung Electronics and SK hynix, as part of the government's drive to spread artificial intelligence (AI)-led growth, the industry ministry said Thursday.

It is a follow-up plan to the government's tripolar mega projects, unveiled by President Lee Jae Myung earlier this week, aimed at advancing technologies across the country and turning Korea into an industrial powerhouse in the emerging AI era.

According to the Ministry of Trade, Industry and Resources, Samsung Group pledged to invest a total of 140 trillion won in Chungcheong Province to build an HBM fab and packaging facility by Samsung Electronics, as well as an organic light-emitting diode and next-generation display production line by Samsung Display.

Samsung Electro-Mechanics will construct high-performance package substrate facilities for AI servers and Samsung SDI will build an advanced battery manufacturing factory.

Samsung Group expects the investments to create approximately 250,000 new jobs.

"Located at the heart of the country, the Chungcheong region will continue to grow into a global hub for IT materials and components," Samsung Electronics Chairman Lee Jae-yong said during a televised briefing.

Lee also pledged to develop the Chungcheong region into a key base for AI-era materials and components.

In detail, Samsung Electronics will invest 56 trillion won while Samsung Display will invest an additional 67 trillion won.

Samsung Electro-Mechanics will invest 8 trillion won, while Samsung SDI will invest 9 trillion won in its new battery manufacturing plant.

SK hynix announced that will invest 100 trillion won in building a NAND flash and advanced packaging fab, while pharmaceutical giant Celltrion pledged to invest 2 trillion won in a bio pharmaceutical manufacturing plant.

SK hynix Chief Executive Officer (CEO) Kwak Noh-jung said the company will invest 100 trillion won to establish Cheongju as its next-generation NAND flash production hub.

The chipmaker plans to invest 80 trillion won in the M17 fabrication plant, which will produce NAND flash memory, and an additional 20 trillion won in advanced packaging facilities, including the P&T7 plant, to strengthen its chip packaging capabilities amid growing demand for NAND products.

"The new M17 fab is scheduled to break ground next year and is targeted to begin operations in the first half of 2029," Kwak said.

He said Cheongju is the company's most suitable location for rapidly and efficiently constructing a new NAND fabrication plant.

"The site is connected to our existing fabs in Cheongju, allowing for efficient production, and much of the necessary infrastructure, including land, electricity and water supply, is already in place," he said. "These advantages will enable us to begin construction immediately."

Other companies also invest a combined 150 trillion won in an AI data center in Chungcheong.

To support the investment pledges, the industry ministry unveiled a strategy that includes tax incentives, policy financing, administrative support and government subsidies.

The government also pledged to foster a region-based industrial ecosystem where companies can carry out all stages of their business locally, from recruitment, education and research and development (R&D) to manufacturing.

"The Chungcheong region has long been known as a transportation hub where people, technology and industry converge," Industry Minister Kim Jung-kwan said. "Growth in Chungcheong's advanced industries will drive growth in Korea's industry as a whole."