South Korean tech giants commit over $550 billion to ease ‘RAMageddon’
South Korean semiconductor and tech companies, including Samsung and SK Hynix, have announced over $900 billion in investments to expand memory chip production and AI data centers, responding to a global memory chip shortage driven by AI growth.
South Korea’s largest memory chip makers, Samsung and SK Hynix, along with other tech giants, have pledged massive investments to alleviate the global memory chip shortage, dubbed 'RAMageddon'. President Jae Myung Lee unveiled the national investment plan at a Monday press briefing, outlining three key areas: memory chips, AI data centers, and physical AI.
The memory chip bucket includes $518 billion for four new fabs in the southwestern region and $52 billion for an HBM (high bandwidth memory) packaging hub in the central region. An additional $356 billion is earmarked for AI data centers to be built by companies like SK, GS, and Naver by 2035. In total, South Korean tech companies have committed over $900 billion to AI and chip production.
In a televised address, President Lee called semiconductors, physical AI, and AI data centers the 'triple axis' for South Korea's next industrial era and urged companies to accelerate investments in the southwest, as existing facilities in Yongin and Pyeongtaek have 'already reached their limits'. He pushed back against claims of government pressure, stating the decisions reflected the companies' own judgment.
Samsung separately announced plans to invest 2,655 trillion won (~$1.7 trillion) over the next decade, with 425 trillion won designated for the Honam region in the southwest, citing incentives around power, water, workforce, and living conditions as key factors for selecting Gwangju for a new fab. SK Group unveiled a 2,100 trillion won (~$1.4 trillion) medium- to long-term roadmap, including 1,100 trillion won for semiconductor expansion and 1,000 trillion won for AI data centers nationwide.
These investments come amid record demand for memory chips from AI buildout, benefiting Samsung, SK Hynix, and US-based Micron. However, the risk remains that by the time new fabs are ready, demand may have subsided, leading to oversupply and price crashes. The global AI chip supply chain will be watching closely to see if South Korea can execute its ambitious plans.
