Breaking

South Korea Backs Samsung, SK Hynix in Roughly $518B Plan for Four New Fabs

June 29, 2026 at 05:30 EDT

Infra & Chips
Manufacturing

South Korea's government announced on June 29, 2026 that Samsung Electronics and SK Hynix will each build two new memory-chip fabrication plants near Gwangju in the country's southwest, four in total, with the two companies investing a combined roughly 800 trillion won (about $518 billion). The move follows the companies' assessment that existing investments alone cannot meet surging demand amid a worldwide memory shortage.

South Korea · Samsung & SK hynix

A $520B Bet to Break the AI Memory Crunch

A national semiconductor project will add four new fabs in Jeolla Province to chase soaring AI-data-center demand for HBM — but the plants won't run at full tilt until after H2 2027, leaving the shortage intact for years.

~$520B

Total semiconductor ecosystem investment

New fabs — Samsung & SK hynix, two each

90%+

Global DRAM held by Samsung, SK hynix & Micron

Where 2026 DRAM output goes

AI servers could swallow up to 70% of global production.

up to 70%

AI servers

~30%

Cars, phones & all other

South Korea chip capex

2026 jumps 29.6% year-on-year, then holds high.

$35B

2026

$38B

2027

$37B

2028

$73B

Samsung
2026 plan

UPSIDE

Memory-maker profitability soaring on the AI boom
SK hynix and Micron crossed $1 trillion valuations
3–5 year supply contracts with price floors surging

CONCERNS

New fabs only ramp after H2 2027 — no near-term relief
Shortage may persist beyond 2026, possibly to 2030
Hyperscaler lock-ins squeeze cars, phones & consumers

A massive build-out — but its effect on supply-and-demand is still years away.

Existing spending went to equipment and packaging, not wafer capacity. With the new cluster's full operation only after H2 2027, the squeeze is likely to run well into 2027 and beyond.

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