In an effort to meet the growing demand for artificial intelligence, South Korean tech giants Samsung Electronics and SK Hynix announced on Monday that they would invest a total of 800 trillion won ($576 billion) in the construction of a new computer chip manufacturing hub in the southwest of the nation.
The initiative, which aligns with the government’s plans to increase investment outside of the greater Seoul metropolitan area, the nation’s economic hub and the center of its semiconductor industry, was announced Monday by President Lee Jae Myung along with the chairs of the corporations.
Because it lacks significant industrial centers and has historically lagged in economic development, the Southwest has received special attention. For a long time, Lee’s liberal Democratic Party has used the area as a political base.
In addition to their current production facilities in Gyeonggi Province, south of Seoul, Samsung and SK Hynix, which together make almost two-thirds of the world’s memory chips, announced that they will each construct two fabrication units in the southwest.
According to Samsung Chairman Lee Jae-yong, the company’s new factories will be constructed in Gwangju, a city in the southwest. Experts have suggested a number of possible locations, including the grounds of a military air base that will be relocated.
When the southwest areas’ factories would be finished was not stated by the firms.
The project would be a complicated, large-scale undertaking requiring “vast sites, along with sufficient power, water, and skilled workers,” according to SK Hynix Chairman Chey Tae-won.
He said that the establishment of SK Hynix’s significant manufacturing cluster in Gyeonggi Province took nine years.
However, Chey stated that the corporation must expand its manufacturing facilities significantly in order to meet the demand from around the world.
Questions regarding whether the southwest has adequate water and electricity to operate large semiconductor factories were disregarded by government representatives.
They said that the chipmakers would benefit from the region’s prowess in renewable energy as they deal with mounting demand from around the world to switch to cleaner electrical sources.
As demand for memory chips has increased due to rising worldwide investment in data centers and other AI infrastructure, Samsung and SK Hynix have announced record earnings in recent months.
As the technology advances to include AI-powered industrial robots and autonomous cars, government authorities and business experts anticipate that demand for AI-driven products will continue to rise.
According to the chipmakers, their current semiconductor facilities in Gyeonggi Province might fill up sooner than anticipated.
At the event on Monday, government representatives described plans to create what they called a national semiconductor ecosystem, with data centers being constructed all over the nation, existing manufacturing hubs in the southeast increasing production of chip components and materials, and the central Chungcheong region specializing in chip packaging.
“We must establish the core building blocks of artificial intelligence faster than any other country. Semiconductors, physical AI, and AI data centers are the three pillars of our next great leap forward,” the president said.
