South Korea is investing $520 billion in Samsung and SK Hynix to build more HBM fabs for AI

As home to two of the world's largest memory makers, Samsung and SK Hynix, the South Korean economy is definitely benefiting from the current memory crisis, which has seen prices and profits hit unforeseen levels. Long story short, in the AI era of LLMs, agents, inference, and cloud-based computing, the demand for high-bandwidth memory (HBM) chips has reached a point where supply would take years to catch up.

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And with that, South Korean President Lee Jae Myung has announced a $520 billion USD public and private investment to expand the chipmaking capabilities of Samsung and SK Hynix so the country can remain a leader in the AI race and the memory market. And the announcement was made in a televised address with Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Chey Tae-won.

According to the announcement, the majority of the $520 billion will be put toward the construction of four new fabs, two for Samsung and two for SK Hynix. The two plants will reportedly be built outside Seoul, in a mostly rural area. They will focus on producing lucrative HBM for the AI and data center markets rather than memory for the consumer technology market.

"We will focus our investment on HBM fabs," Samsung Chairman Lee Jae-yong confirms. The inclusion of the South Korean government means these new facilities can be constructed on a much faster timeline, with the expectation that approvals, subsidies, and permits will be available more quickly. And with that, the expedited timeline would have these new fabs go online in the mid-2030s rather than the 2040s.

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According to the announcement, the new government investment will also accelerate the construction of existing Samsung and SK Hynix projects.