Samsung Eyes $648 Billion Mega Investment to Supercharge South Korea's AI and Chip Ambitions

Samsung Group is set to pledge 1,000 trillion won, equivalent to about £478 billion, in South Korea over the next decade as part of a wide-ranging investment drive centred on artificial intelligence and semiconductor manufacturing.

According to reports, the announcement is expected to be made on Monday during a meeting between President Lee Jae Myung and senior executives from Samsung Electronics and SK Hynix.

The proposed investment would cover AI data centres, batteries, displays, and a possible 300 trillion won, or around £143 billion, programme to build semiconductor factories in the country's southwest. The plans come as South Korea looks to build on the rapid growth in AI-driven demand for advanced memory chips while also encouraging economic development outside the Seoul metropolitan area. However, questions remain over infrastructure, labour shortages, and whether the proposed shift in investment away from the capital region can achieve its intended goals.

Samsung's Investment Plan Reflects South Korea's Ambitions Beyond Seoul

The reported investment forms part of a wider strategy by the South Korean government to strengthen its position in industries linked to artificial intelligence. The presidential office has said it will unveil 'three mega-projects' on Monday that are intended to drive a national leap forward, with semiconductors, AI data centres, and robotics all expected to feature.

Policy adviser Kim Yong-beom said the plans would be presented jointly by the government and industry, with major investment anticipated across those sectors.

According to the newspaper report, Samsung's commitment would include spending on AI data centres, batteries, and display technology, alongside a possible £143 billion investment to establish semiconductor manufacturing facilities in the southwest of the country.

Samsung Electronics and SK Hynix, both of which have benefited from soaring demand for AI memory chips, are expected to attend the meeting with President Lee. However, both companies declined to comment on the reported plans.

South Korea already occupies a leading position in the global memory chip market. Samsung Electronics remains the world's largest producer of DRAM memory chips by revenue, holding a 38 per cent market share in the first quarter of 2026. SK Hynix follows with 29 per cent, while Micron accounts for 22 per cent. These chips are essential components in laptops, smartphones, and AI data centres, placing South Korea at the centre of the current AI boom.

Samsung Group, the country's largest conglomerate, also includes battery manufacturer Samsung SDI and IT services company Samsung SDS.

Kim has previously said Samsung and SK Hynix may have to accelerate projects originally planned for the 2040s into the mid-2030s because AI-related memory demand is increasing faster than expected. He warned that the Seoul region no longer has enough room, power, or water to support continued expansion at the required pace.

Regional Investment Plans Continue to Divide Opinion

While the proposed investment is intended to spread economic activity beyond Seoul, it has also become the subject of political debate.

The concentration of semiconductor production around the capital has long attracted criticism, and President Lee has promoted balanced regional development through a plan to establish 'five regional hubs and three special self-governing provinces'. Seoul and its surrounding area accounted for 52.8 per cent of South Korea's gross regional domestic product in 2024, highlighting the country's regional economic imbalance.

Local media have reported that Samsung Electronics is considering Gwangju as a potential location for future investment. The city sits in the southwest of South Korea and has one of the country's smaller regional economies with below-average output per person.

However, opposition lawmakers argue the investment plans are politically motivated. They have accused the government of encouraging companies to invest in the ruling party's southwestern stronghold ahead of the party's leadership contest.

People Power Party spokesperson Park Sung-hoon said: 'Where semiconductor factories are built should be decided by companies, not by the president.'

Experts have also questioned whether the proposed semiconductor hub would achieve its intended economic goals.

Kim Tae-yun, a professor of administration at Hanyang University, said securing skilled workers in the southwest would be extremely difficult and could determine whether the project succeeds.

He added: 'Unless a truly cutting-edge fab is built, the local economic impact will be limited. It risks becoming little more than a construction project and a real estate boost.'

The debate has also unsettled existing semiconductor manufacturing centres. In Icheon, where SK Hynix operates major production facilities, concerns have grown that future investment elsewhere could eventually reduce activity in the city.

Jo Jun-taek, who leads a grassroots group in Icheon, said: 'Most of the city's tax revenue comes from SK's chip plant, and our welfare depends on it.'

He added, 'If a new cluster is created, we think SK will likely cut output here and eventually close the plant. That would cause an outflow of people. The city would become a ghost town.'

The issue has gained added political attention as President Lee's approval rating fell to 51 per cent, its lowest level since he took office in June last year. Meanwhile, several regions have continued promoting themselves as candidates for future semiconductor investment, with proposals ranging from a 500 trillion won chip complex in the southwest to expanded manufacturing clusters elsewhere in the country.