South Korean President Lee Jae Myung on Monday committed Samsung Electronics and SK Hynix to build four new chip fabrication plants in the country's southwest as the centerpiece of an 800 trillion won, or $518 billion, national semiconductor program, an industrial push the BBC valued at $880 billion overall and Al Jazeera pegged at more than $1 trillion once data centers and packaging are included.
The announcement, delivered in a televised event alongside the chairmen of Samsung and SK Group, is Seoul's most aggressive attempt yet to lock in the high-bandwidth memory supply chain that the global AI boom now runs on, and to do it on Korean soil before Taiwan, Japan and China widen their own offers. Samsung shares fell 4.8 percent in Seoul and SK Hynix dropped 1.6 percent on the day, paring an early decline of nearly 6 percent.
What was unveiled
Samsung Electronics and SK Hynix will each build two new fabs in the southwest with their suppliers, Industry Minister Kim Jung-kwan said, under what the government calls a national semiconductor ecosystem project. Gwangju and South Jeolla province will add 5 trillion to 20 trillion won, or $3.2 billion to $13 billion, to the buildout, and another 81 trillion won, about $52.5 billion, is earmarked for a chip-packaging cluster in the Chungcheong area near Seoul, according to Al Jazeera.
A parallel data-center plan, backed by SK Group, GS Group and Naver, carries 550 trillion won, or about $356 billion, in committed spending. Science Minister Bae Kyung-hoon said the long-range target is an additional 10-gigawatt AI data-center buildout with total investment exceeding 1,000 trillion won, or roughly $648 billion, by 2035. The BBC put the headline figure at "at least $880bn" once chips, data centers and robotics are combined.
Why it matters
SK Hynix is the dominant supplier of high-bandwidth memory to Nvidia, and Samsung has been spending to close the gap. With cloud providers and chipmakers warning of shortages that last week forced Apple and Microsoft to raise consumer prices, Seoul's bet is that locking new capacity to Korean ground gives the country leverage in the U.S.-China chip rivalry rather than ceding it to Taiwan's TSMC or to U.S. fabs subsidized under the CHIPS Act.
Lee framed the program as a race. "We must secure the core elements of AI faster than any other country," he said, calling semiconductors, physical AI and data centers "the triple axis for a great leap forward."
On permitting
Kim said the government would compress approval timelines to get shovels in the ground. "We will rapidly expand our production capacity by drastically shortening the timeline from licensing to construction," he said, according to CNBC. The Maeil Business Newspaper reported Friday that Samsung Group separately plans a 1,000 trillion won, $646 billion, decade-long capital program spanning fabs, AI data centers, packaging, batteries and displays, though the report did not say whether those numbers overlap with Monday's announcement.
The political knock
The opposition has objected that the second cluster's location in Honam, a region where Al Jazeera reported 85 percent of voters backed Lee in last year's presidential race, reflects electoral math more than industrial logic. Critics have accused the government of pressuring the chipmakers to invest where the ruling Democratic Party draws its base rather than letting Samsung and SK Hynix pick the most commercially viable sites. Lee defended the southwestern hub in a series of X posts over the weekend, pointing to untapped power resources in the region and casting the regional rebalancing as a matter of "survival" for areas outside Seoul.
Investors are also watching whether Korean balance sheets can absorb the spending without echoing the financing strain that hit Oracle's stock 19 percent last week. The Bank for International Settlements on Sunday named the AI capital-spending boom among the leading threats to global prosperity in its 2026 annual report.
The next milestone is licensing. Kim's ministry has not published a fab-by-fab start date, but the government has framed the timeline in months, not years.