South Korea unveils $1.4 trillion AI chip plan with Samsung and SK Hynix at the centre
President Lee Jae Myung staked his legacy on a decade-long push to double memory chip capacity, backed by Samsung and SK Hynix pledges worth 3,200 trillion won.
South Korea's government presented a colossal investment plan on 30 June 2026, aiming to cement the country's lead in memory semiconductors essential for artificial intelligence. The scheme, described by President Lee Jae Myung as a "great leap forward" to "survive in the AI war", combines public and private money across chip fabrication plants, AI data centres and energy infrastructure.
The scale of the commitment
At the core are two projects detailed by Industry Minister Kim Jung-kwan and Science Minister Bae Kyung-hoon. An initial 800 trillion won (€455 billion) package covers four advanced chip plants, two each from Samsung Electronics and SK Hynix, plus supporting infrastructure in the southwest. A further 1,000 trillion won (€568 billion) is earmarked for AI data centres, targeting 10 gigawatts of total national capacity by 2035. Together, the two firms have pledged 3,200 trillion won ($2.07 trillion) when previously announced projects are included, according to Reuters.
- Chip plants
- 800 trillion won
- AI data centres
- 1000 trillion won
The national champions
Samsung and SK Hynix already command the high-bandwidth memory (HBM) market that feeds AI processors from hyperscalers and device makers like Apple. President Lee, flanked by the companies' bosses, framed the investment as a departure from the industry's historically cautious capacity cycles. "Thanks to this, we will maintain an overwhelming market leadership position and a decisive technological advantage in the memory semiconductor sector," Minister Kim said.
Oversupply fears and analyst caution
Not everyone is convinced the boom will last. Morningstar analyst Jing Jie Yu warned that chip plants take years to build and ramp up, meaning much of the new capacity will arrive only in the next decade.
The memory cycle has historically punished overbuilding, and the plan's success hinges on AI investment continuing at its current pace.We see memory pricing remaining a function of demand and supply, and accelerating capex over the next decade further increases the risk of an oversupply longer term.
Energy and housing ripple effects
To power the expansion, the government is also looking to shorten nuclear reactor construction times from the typical nine to ten years, Bloomberg reported. Meanwhile, property curbs were tightened in districts near chip hubs such as Hwaseong's Dongtan and Yongin's Giheung after home prices jumped on speculative buying tied to the semiconductor boom.
A sovereignty play
Beyond economics, officials cast AI as a matter of national sovereignty, touching everything from cars and education to healthcare and defence. The sector grew 47% year-on-year, with Gartner projecting a $2.6 trillion global market in 2026. South Korea's bet is that its memory-chip dominance can translate into a broader AI ecosystem that rivals the United States, China and Taiwan.
