The plan also absorbs and accelerates projects already underway. The government said it would help Samsung and SK Hynix speed up construction of their existing capital-region clusters, with SK Group pulling forward the ramp of its Yongin memory site from 2045 to 2033, part of a stated goal to double the country's memory output within five years. SK Hynix supplies the bulk of the HBM that Nvidia depends on for its AI accelerators , the very strain this expansion is meant to relieve. While semiconductors are the focus of the investment, with the priority being a decisive lead in memory chips, the companies will also work on AI robots, physical AI, and AI data centers.
The investment partnership appears to be the latest piece of a broader strategy. SK Hynix had already committed $15 billion to new semiconductor facilities in February, a figure that now reads as an early piece of the larger national framework. Earlier iterations of the country's cluster plan had pegged long-term investment at around $471 billion, stretching to 2047, so the new figure represents a substantial expansion as AI demand projections have climbed. The fabs are targeted for completion in the mid-2030s.
The announcement caps an extraordinary stretch for both firms. SK Hynix overtook Samsung in June to become South Korea's most valuable listed company for the first time in more than 25 years, lifted by its commanding lead in HBM, while Samsung's chip division alone booked 53.7 trillion won in first-quarter operating profit as AI-driven memory shortages are expected to strain the companies' capacity past 2027 .
The scale of the investments also invites inevitable comparison. At roughly $520 billion, South Korea’s plan dwarfs the United States' CHIPS Act , which provided about $52 billion in direct subsidies, by a factor of ten. Although the comparison is imperfect, since the U.S. figure is a government subsidy while the Korean number appears to be mostly private investment that the state is coordinating.
The strategic logic is the same on both sides of the Pacific: secure domestic capacity for the chips that underpin AI, at a moment when the U.S., China, Japan and the EU are all pursuing their own semiconductor industrial strategies. For Seoul, the specific prize is memory, the segment where its two companies already hold a commanding global position, with the goal being to extend that lead rather than merely defend it.
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Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-24/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Etiido Uko Social Links Navigation News Contributor Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.
ravewulf What we need is more DDR5 capacity to increase stock and lower prices Reply
Lieutenant Barclay "public-private plan" to expand the "dominance" of the RAM cartel. No doubt this will greatly benefit the Korean people billionaires. Reply
Zaranthos ravewulf said: What we need is more DDR5 capacity to increase stock and lower prices What we really need are some companies to speculate on consumer or business interest in HBM to build things WE can use hoping to profit big only to find their supply exceeds demand so they sell at a loss. We very well could have a scenario where DDR4 and DDR5 supply is so bad someone makes HBM products that end up in the consumer market that vastly outperform any DDR systems. That or the AI bubble bursts and HBM becomes cheap enough for consumer devices. There are also many alternatives to HBM currently available or being developed and with massive capital expenditures many of these things will mature faster. Ultimately all of this will drive technology and innovation bringing a better future sooner. The annoyance is real but so is the excitement for what's to come. Reply
usertests Zaranthos said: We very well could have a scenario where DDR4 and DDR5 supply is so bad someone makes HBM products that end up in the consumer market that vastly outperform any DDR systems. Seems unlikely. HBM will always be expensive since it uses TSV stacking and ~3x wafers for the same capacity as DDR5, while companies are eyeballing high DDR5 prices and willing to cater to that market a little: After Earning Major Profits From HBM, SK Hynix Now Plans To Prioritize DDR5 “General-Purpose DRAM” Production Reply
Zaranthos usertests said: Seems unlikely. HBM will always be expensive since it uses TSV stacking and ~3x wafers for the same capacity as DDR5, while companies are eyeballing high DDR5 prices and willing to cater to that market a little: After Earning Major Profits From HBM, SK Hynix Now Plans To Prioritize DDR5 “General-Purpose DRAM” Production What does a high end Nvidia gaming graphics card cost now? Expensive is the new normal, might as well buy better hardware if you're dropping several grand to play a game… Reply
alan.campbell99 How much of this HBM gets packaged with GPUs which then go to sit idle in warehouses because datacenters aren't built quickly enough Reply
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/semiconductors/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/semiconductors/south-korea-unveils-usd520-billion-investment-plan-with-samsung-and-sk-hynix-to-expand-memory-chip-dominance-plan-includes-four-new-fabs-and-hbm-facilities-amid-strong-government-support#main
- https://www.tomshardware.com/subscription
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