South Korea unveils $576bn AI-chip drive with Samsung, SK Hynix

TL;DR:

  • President Lee Jae Myung has unveiled more than $576bn (about £445bn) in chip and AI investment to secure South Korea’s global lead.
  • Samsung and SK Hynix will spend 800 trillion won building four new fabrication sites in the country’s southwest.
  • Critics question whether the region has the power, water and skilled labour to deliver, and warn of a possible supply glut.

South Korea has laid out a sweeping industrial strategy built on semiconductors and artificial intelligence, with President Lee Jae Myung announcing over $576bn (roughly £445bn) in chip investment. Flanked by the heads of Samsung Electronics and SK Hynix, Lee cast the plan as a “great leap forward” centred on a “triple axis” of semiconductors, physical AI and data centres.

A bet on the southwest

Samsung and SK Hynix will invest 800 trillion won ($518bn) to build two new fabrication plants each in the southwest, with local governments and a chip-packaging cluster near Seoul adding more. The country aims to invest 550 trillion won in AI data centres by 2029, rising beyond 1,000 trillion won by 2035, while spreading infrastructure beyond the capital.

The plan leans on the two firms’ commanding position in high-bandwidth memory (HBM) chips, essential to advanced AI processors. But experts cautioned the pace looks aggressive. “From the outside, it still appears to be moving too fast,” said Seoul National University professor Lee Jong-ho, warning that severe demand falls would carry harsh consequences. SK Hynix’s chairman noted it took nine years to build the firm’s existing Yongin cluster. Shares in Samsung and SK Hynix fell 4.86% and 1.68% as some analysts flagged oversupply risk, and opposition politicians questioned the political motives behind siting the hub in a region that heavily backed Lee.

Looking forward

The scale dwarfs anything the UK has contemplated. Britain’s sovereign-AI ambitions — domestic compute, research-lab funding and data-centre planning — operate at a fraction of this commitment, underscoring how far state-backed industrial policy elsewhere is reshaping the global compute map. For UK firms, Korea’s drive is a reminder that the chips underpinning their AI tools are the subject of an escalating, government-funded race they are largely spectators to.

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