Samsung, SK hynix weigh massive expansion of chip investment in southwest region

Samsung Electronics and SK hynix are preparing to announce major investments in Korea's southwestern region, with the scale of the deals — potentially in the hundreds of trillions of won — exceeding what was initially expected, according to political and business sources Tuesday.

The expansion is being driven by President Lee Jae Myung, who has made regional economic development and balanced national growth a key policy priority and has actively pushed large conglomerates to invest outside the greater Seoul area. According to political and business sources, Lee has been holding a series of meetings with the chiefs of both companies to coordinate the specifics of the deals ahead of public announcements.

The investments are expected to go well beyond the back-end packaging plants originally discussed, potentially including front-end fabrication facilities — the most capital-intensive stage of chip production. Building a single semiconductor fab currently costs at least 60 trillion won ($40 billion).

The news comes on the heels of Lee's meeting with SK Group Chairman Chey Tae-won and SK hynix CEO Kwak Noh-jung on Friday to discuss semiconductor and AI competitiveness, with talks covering both investment plans and AI data center development. On Thursday, Lee is set to hold a private meeting with Samsung Electronics Executive Chairman Lee Jae-yong to finalize investment plans for the southwestern region. 

SK's Chey is also slated to travel to the southwestern city of Gwangju on June 30 to announce a regional investment plan. Samsung is separately expected to unveil plans for what would be Korea's largest AI data center in Asan, South Chungcheong, on July 2. 

Later this month, the presidential office plans to host a working-level meeting with CEOs of major conglomerates, where business leaders are expected to raise practical concerns about regional investment — including the need for expanded power and industrial water infrastructure — and request tax incentives and regulatory relief.

BY KIM SU-MIN, YOON SUNG-MIN [lee.jian@joongang.co.kr]