Reported by NUPIAO Editorial Team
On June 29, Kim Jong-gun, South Korea’s Minister of Trade, Industry, and Energy, dropped some serious news: the country is going all-in with an 800 trillion won (roughly $3.52 trillion RMB) investment. The goal? To build four storage chip wafer fabs in the southwestern regions of Gwangju and Jeolla. This isn’t just a small upgrade; it’s about creating the nation’s second-largest semiconductor cluster right after the capital area.
Here’s the kicker: Samsung Electronics and SK Hynix are jointly shelling out 81 trillion won to set up a cutting-edge advanced packaging base in the Chungcheong region. Why? Because the world needs more High Bandwidth Memory (HBM) to fuel the AI boom, and they need it fast.
So, where does that 800 trillion won actually go? Mostly into front-end wafer manufacturing in Gwangju. Both Samsung and SK Hynix will each build two massive factories there. This is a strategic move to relieve the crushing pressure on the current facilities in Yongin and Pyeongtaek near Seoul, which are hitting a wall due to saturated power supplies and industrial water resources.
The 81 trillion won earmarked for Chungcheong is dedicated to building a large-scale advanced packaging hub, perfectly matched for HBM stacking demands. On top of that, there’s another 30 trillion won in special funds ready to support the entire chip lifecycle—from R&D and design to testing—over the next 15 years.
This massive semiconductor blueprint is the crown jewel of the government’s “Three Super National Projects.” It’s pushing not just Samsung and SK Hynix, but a whole ecosystem of companies, to pour money into three key tracks: traditional semiconductors, physical AI, and AI data centers.
According to Minister Kim, the government is supercharging the process. They’re aiming to slash the construction timeline for new fabs by up to 12 years! What was once planned for the mid-to-late 2040s is now targeted for completion by the mid-2030s. Talk about speeding things up.
Right on schedule, Samsung officially unveiled its own mammoth plan: a total investment of 2,655 trillion won (approx. $11.68 trillion RMB). Of that, 2,030 trillion won is specifically for expanding their semiconductor clusters in Yongin and Pyeongtaek.
Lee Jae-yong, Chairman of Samsung Electronics, put it plainly: current capacity just can’t keep up with market demand. He’s already looking at building a new investment base in Gwangju. But he’s not stopping there. Plans are afoot to push robotics investments in Gyeyang, biomedicine in Incheon, batteries in Ulsan, and semiconductor substrates in Busan.
Meanwhile, Choi Tae-won, Chairman of SK Group, announced a staggering additional investment of 1,100 trillion won (approx. $4.84 trillion RMB). A huge chunk of this, 400 trillion won, is heading straight to the southwestern region to build new semiconductor clusters.
Choi revealed an even bigger picture: by 2035, the group aims to have 15 gigawatts (GW) of AI data center capacity online. This is meant to be the core foundation of Korea’s national infrastructure and the “Physical AI era.” The total investment for this vision? A mind-boggling 1 quadrillion won.
So, why are these two storage giants willing to throw such unprecedented amounts of capital at the table? Simple: their financial results are absolutely crushing it right now.
Take SK Hynix, for example. Their Q1 2026 earnings report showed revenue skyrocketing to 52.58 trillion won, a 198% jump year-over-year. Operating profit hit 37.61 trillion won, up over 400%, with an operating margin breaking through 72%. With over 55% of the global HBM market share and supplying 70% of NVIDIA’s latest GPU orders, their cash flow is overflowing, giving them the perfect runway for expansion.
Samsung Electronics isn’t far behind. Their Q1 results saw massive revenue and profit growth too. They’ve kept their DRAM and NAND business firmly in the #1 spot globally, and with HBM4 now shipping in bulk to top cloud providers, their internal cash reserves are rock solid.
Here’s something interesting: SK Hynix filed for an IPO with the US SEC on June 24, planning to list on Nasdaq under the ticker “SKHY.” Heavy hitters like Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase are lining up as underwriters.
Rumors suggest SK Hynix might price their American Depositary Receipts (ADRs) at $166 per share on the Nasdaq Global Select Market, raising about $29.4 billion. Analysts think US investors buying at this price are basically getting a steal, predicting a potential 20% upside and helping close the valuation gap with competitor Micron Technology.
Then, on June 25, Jeff Kim, a research head at Jefferies, noted that Samsung Electronics would likely follow SK Hynix’s lead and issue ADRs on the US stock market. He argued this would provide strong support for Korean chip stocks, which currently lag behind Micron’s valuation. Kim sees this as a critical “turning point” for the sector, where listing in the US could be the catalyst needed to fix their valuations.
Looking back, the last time we saw such massive counter-cyclical capital injection was back during the 2008 global financial crisis. When chip demand crashed and rivals like Micron and Elpida shut down lines and cut R&D budgets, Samsung went against the grain, pouring in $20 billion to expand storage fabs and kickstart 3D NAND tech. They used the cycle bottom to grab market share. Similarly, when prices dipped again in 2015, SK Hynix boosted R&D spending by 25%, positioning themselves early for first-gen HBM technology. But let’s be real: this new 800 trillion won national plan dwarfs anything we’ve seen before in terms of scale and supply chain coverage.
Minister Kim predicts the global storage chip market will quadruple in size over the next five years. A recent report from Citigroup suggests that this government-led surge should supercharge Korea’s entire semiconductor supply chain, including equipment manufacturers. With AI demand looking sky-high and greenfield expansion plans accelerating, Citigroup remains bullish on Korean chip-making equipment stocks.
Of course, not everyone is purely optimistic. Some analysts warn that AI-specific storage chips require three to four times the capacity of traditional consumer-grade memory. While the global HBM shortage means Samsung and SK Hynix are smart to lock in long-term customer orders now, making short-term overcapacity unlikely, the risk of cyclical price drops looms over the next ten years. It’s a high-stakes game, and the race is only just beginning.
