South Korean tech giants commit over $550B to ease ‘ RAMageddon’

The world’s 2 largest representation spot companies program to put $518 cardinal (~800 trillion won) to physique 4 caller representation fabs successful southwestern South Korea, a portion that has historically attracted small semiconductor investment.

The announcement is portion of the country’s sweeping nationalist concern program spanning semiconductors, AI information centers, and carnal AI, which was unveiled astatine a statesmanlike briefing connected Monday, with the chairmen of Samsung and SK Hynix successful attendance. The program breaks down into 3 buckets. In the representation spot bucket is $518 cardinal for 4 caller representation fabs successful the southwest, positive $52 cardinal for an HBM (high bandwidth memory) packaging hub successful the cardinal region. Then there’s different $356 cardinal (550 trillion won) for AI information centers to beryllium built by Korean tech and vigor behemoths specified arsenic SK, GS and Naver done 2035.

All told, South Korean tech companies person committed to walk implicit $900 cardinal connected AI and the demands for chips it is creating. With this, the federation hopes to catapult itself into becoming much of an AI powerfulness subordinate than it already is. Currently, Samsung and SK Hynix (along with U.S. representation spot shaper Micron) are each enjoying grounds request from what’s been called RAMageddon, a worldwide shortage of representation chips caused by the AI buildout.

“Semiconductors, carnal AI, and AI information centers are the triple axis for South Korea’s adjacent concern era,” President Jae Myung Lee said in a televised address Monday, calling 2026 the twelvemonth South Korea indispensable found itself arsenic an “irreplaceable” concern power.

Lee said existing spot facilities successful Yongin and Pyeongtaek, the bosom of South Korea’s semiconductor loop conscionable southbound of Seoul, person “already reached their limits,” and urged companies to accelerate concern successful the southwest, hoping to spreading the AI wealthiness beyond the nation’s capital. “We indispensable unafraid overwhelming accumulation capableness successful advance,” helium said.

Yet, Lee pushed backmost against media reports that the authorities had pressured companies into the investments, reportedly saying the decisions reflected the companies’ ain judgment. “The government’s relation is to put its capabilities truthful that companies tin put without losses and with amended prospects,” helium was quoted arsenic saying.

Samsung separately published a property merchandise Monday, announcing plans to put 2,655 trillion won (~$1.7 trillion) implicit the adjacent decade, with 425 trillion won earmarked for the Honam region, the southwestern country of the Korean peninsula. The institution cited expected incentives astir power, water, workforce, and surviving conditions arsenic cardinal factors successful selecting Gwangju, astir 300 kilometers southbound of Seoul, for a caller semiconductor fab, alongside an AI information halfway successful Haenam, astatine the confederate extremity of the peninsula.

That is not an outlandish sum compared to U.S. tech giants Alphabet, Amazon, Meta, and Microsoft, who volition collectively walk $650 cardinal connected AI infrastructure this twelvemonth alone, according to Reuters.

Meanwhile, SK Group announced a 2,100 trillion won (~$1.4 trillion) medium-to-long word concern roadmap, 1,100 trillion won to grow semiconductor accumulation capableness and 1,000 trillion won for AI information centers nationwide. SK Hynix, the group’s halfway semiconductor affiliate, is cardinal to the spot enlargement push, portion SK Telecom volition pb the buildout of 15 gigawatts of AI information halfway capableness crossed the country.

Whether the ambition translates into execution is different question. Deep tech industries similar semiconductors and AI don’t determination connected governmental oregon adjacent lawsuit request timelines. Fabs instrumentality years to physique and the hazard is that, by the clip they are ready, the request that caused them volition person ebbed, leaving companies with oversupply and crashing prices. For now, the world’s AI spot proviso chain, particularly those bare for each things memory, volition beryllium watching to spot if South Korea tin propulsion it off.