South Korean tech giants commit more than $550 billion to facilitate ‘RAMageddon’

The world’s two largest memory chip companies plan to invest $518 billion (about 800 trillion won) to build four new memory factories in southwestern South Korea, a region that has historically attracted little investment in semiconductors.

The announcement is part of the country’s comprehensive national investment plan that includes semiconductors, AI data centers and physical AI, which was unveiled at a presidential press conference on Monday, in the presence of the heads of Samsung and SK Hynix. The plan is divided into three groups. In the memory chipset, there is $518 billion for four new memory factories in the Southwest, as well as $52 billion for an HBM (High Bandwidth Memory) packaging center in the Central region. Then there is another $356 billion (550 trillion won) for AI data centers to be built by Korean technology and energy giants such as SK, GS and Naver through 2035.

Finally, South Korean technology companies have committed to spending more than $900 billion on artificial intelligence and the demand for the chips that make it. With this, the nation hopes to become an even stronger player in the field of artificial intelligence than it already is. Currently, Samsung and SK Hynix (Together with American memory chip manufacturer Micron) They all have a standard order of what was called Ramageddona global shortage of memory chips due to the construction of artificial intelligence.

“Semiconductors, physical AI, and AI data centers are the triple axis of South Korea’s next industrial era,” said President Jae Myung Lee. In a televised speech South Korea announced on Monday that 2026 is the year in which South Korea must prove itself as an “irreplaceable” industrial power.

Existing chip facilities in Yongin and Pyeongtaek, the heart of South Korea’s semiconductor belt south of Seoul, have “already reached their limits,” Lee said, urging companies to accelerate investment in the southwest, in hopes of spreading the wealth of artificial intelligence beyond the country’s capital. “We must secure huge production capacity in advance,” he said.

However, Lee rejected media reports that the government had put pressure on companies to make investments. It is said The decisions reflect the judgment of private companies. He was quoted as saying: “The role of the government is to invest its capabilities so that companies can invest without losses and with better prospects.”

Samsung Separately published a press release on MondayIt announced plans to invest 2,655 trillion won (about $1.7 trillion) over the next decade, including 425 trillion won allocated to the Honam region, the southwestern corner of the Korean Peninsula. The company cited expected incentives around energy, water, workforce and living conditions as key factors in choosing the city of Gwangju, about 300 kilometers south of Seoul, to establish a new semiconductor factory, along with an artificial intelligence data center in Haenam, at the southern tip of the Korean peninsula.

This is not a strange amount compared to US technology giants Alphabet, Amazon, Meta, and Microsoft, which will collectively spend $650 billion on artificial intelligence infrastructure this year alone. According to Reuters.

Meanwhile, SK Group announced a medium- and long-term investment roadmap worth 2,100 trillion won (about $1.4 trillion), 1,100 trillion won to expand semiconductor production capacity, and 1,000 trillion won for artificial intelligence data centers across the country. SK Hynix, the group’s core semiconductor subsidiary, is central to the chip expansion drive, while SK Telecom will lead the buildout of 15 gigawatts of AI data center capacity across the country.

Whether ambition translates into implementation is another question. Deep technology industries like semiconductors and artificial intelligence do not move according to political timetables or even customer demands. Factories take many years to build, and the danger is that by the time they are ready, the demand that created them will have subsided, leaving companies oversupplied and prices collapsing. For now, the world’s AI chip supply chain, especially those hungry for all things memory, will be watching to see if South Korea can pull it off.