South Korean Tech Giants Pledge $550B to Address Global Memory Chip Shortage

South Korean Tech Giants Pledge $550B to Address Global Memory Chip Shortage">

The world's two largest memory chip companies plan to invest $518 billion (~800 trillion won) to build four new memory fabs in southwestern South Korea, a region that has historically attracted little semiconductor investment. The announcement is part of the country's sweeping national investment plan spanning semiconductors, AI data centers, and physical AI, which was unveiled at a presidential briefing on Monday, with the chairmen of Samsung and SK Hynix in attendance. The plan breaks down into three buckets.

In the memory chip bucket is $518 billion for four new memory fabs in the southwest, plus $52 billion for an HBM (high bandwidth memory) packaging hub in the central region. Then there's another $356 billion (550 trillion won) for AI data centers to be built by Korean tech and energy behemoths such as SK, GS and Naver through 2035. All told, South Korean tech companies have committed to spend over $900 billion on AI and the demands for chips it is creating.

With this, the nation hopes to catapult itself into becoming more of an AI power player than it already is. Currently, Samsung and SK Hynix ( along with U.S. memory chip maker Micron ) are all enjoying record demand from what's been called RAMageddon , a worldwide shortage of memory chips caused by the AI buildout.

"Semiconductors, physical AI, and AI data centers are the triple axis for South Korea's next industrial era," President Jae Myung Lee said in a televised address Monday, calling 2026 the year South Korea must establish itself as an "irreplaceable" industrial power. Lee said existing chip facilities in Yongin and Pyeongtaek, the heart of South Korea's semiconductor belt just south of Seoul, have "already reached their limits," and urged companies to accelerate investment in the southwest, hoping to spreading the AI wealth beyond the nation's capital. "We must secure overwhelming production capacity in advance," he said.

Lee pushed back against media reports that the government had pressured companies into the investments, reportedly saying the decisions reflected the companies' own judgment. "The government's role is to invest its capabilities so that companies can invest without losses and with better prospects," he was quoted as saying. Samsung separately published a press release Monday , announcing plans to invest 2,655 trillion won (~$1.7 trillion) over the next decade, with 425 trillion won earmarked for the Honam region, the southwestern corner of the Korean peninsula.

The company cited expected incentives around power, water, workforce, and living conditions as key factors in selecting Gwangju, roughly 300 kilometers south of Seoul, for a new semiconductor fab, alongside an AI data center in Haenam, at the southern tip of the peninsula. That is not an outlandish sum compared to U.S. tech giants Alphabet, Amazon, Meta, and Microsoft, who will collectively spend $650 billion on AI infrastructure this year alone, according to Reuters .