South Korean tech companies Samsung and SK Hynix have revealed they are building two new chip factories. The project is part of a national program worth the equivalent of over $518 billion.
Investors responded to this announcement with caution. Both stocks lost ground on Monday, according to CNBC. Samsung Electronics shares fell 4.8 percent on Monday, while SK Hynix, after an earlier drop of nearly 6 percent, ultimately closed 1.6 percent lower. Investors seem to be weighing the investments against the high costs and long payback period of the new factories.
President Lee Jae Myung presented the plans as a necessary step to secure South Korea’s technological lead. According to him, countries that master the AI technology of the future will also set the tone economically and strategically, and so the government wants to accelerate the expansion of production capacity for advanced chips. It also aims to significantly strengthen the national AI infrastructure.
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Samsung and SK Hynix are building two new semiconductor factories in southwestern South Korea, as part of a national semiconductor program for which approximately 800 trillion won (around $518 billion) has been allocated. The government aims to use this funding for the development of new high-tech clusters outside the Seoul region. Minister of Trade, Industry, and Energy Jung-Kwan Kim also announced that permitting processes will be significantly shortened so that new factories can begin production more quickly.
These plans come following earlier reports by the South Korean business newspaper Maeil Business Newspaper that Samsung is working on a ten-year investment program. In addition to the construction of new chip factories, the program will also involve the construction of AI data centers and facilities for advanced chip packaging. According to the newspaper, Samsung is also exploring whether previously planned expansions of production capacity can be accelerated to meet the rapidly growing demand for AI hardware.
READ: Samsung to double AI mobile production to 800 million (January 5, 2026)
According to Techzine, the investments align with the global growth of AI infrastructure. Cloud providers and hyperscalers are investing billions in new AI capacity, causing demand for HBM (High Bandwidth Memory) to remain higher than the available supply.
SK Hynix is gaining the most benefits as the leading supplier of advanced HBM chips to Nvidia. However, Samsung has been trying to narrow the gap by investing in memory technology and production capacity.
Earlier this year, SK Hynix crossed the $1 trillion market capitalization mark for the first time amid an AI chip surge.