South Korea taps Samsung, SK Hynix in $745b AI chip push

South Korea on June 29 laid out a sweeping industrial strategy centred on semiconductors and artificial intelligence, as President Lee Jae Myung unveiled over US$576 billion (S$745 billion) in investment to lock in global dominance and drive more balanced growth.

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The plan, anchored by Samsung Electronics and SK Hynix, marks Lee’s boldest push yet to align South Korea’s AI and chip ambitions with his pledge to narrow regional disparities and revive economies beyond the Seoul metropolitan area.

Flanked by the chiefs of the world’s two biggest memory chipmakers, Lee cast the initiative as a “great leap forward”, centred on the “triple axis” of semiconductors, physical AI and data centres.

“We must secure the core elements of AI faster than any other country,” the President said in a televised address.

Samsung and SK Hynix will invest 800 trillion won (S$671 billion) with suppliers to build two chip fabrication sites each in South Korea’s south-west region, Industry Minister Kim Jung-kwan said.

Lee said the country’s south-western city of Gwangju and South Jeolla province will also invest five trillion to 20 trillion won in the projects. A further 81 trillion won is expected for a chip packaging cluster in the Chungcheong area near Seoul.

“To meet the rapidly increasing demand for semiconductors, we need to quickly complete the production hubs that are currently under construction,” Lee said.