Samsung and SK hynix Will Invest $590 Billion in Chip Manufacturing
South Korean technology giants Samsung Electronics and SK hynix will jointly invest more than $590 billion to expand semiconductor production. The large-scale initiative, supported by the South Korean government, aims to double the country's memory chip output over the next five years.
Most of the investment will be allocated to the construction of new manufacturing facilities. Up to five major semiconductor plants are planned for the city of Gwangju. In addition, Samsung will build new chip packaging facilities in the southern part of the country, while SK hynix will expand its NAND flash memory production in the north. Other major companies, including Hyundai Motor, will also participate in the project, directing part of the investment toward the development of data centers and robotics.
Despite the strategic importance of the initiative, shares of both companies fell by more than 5%. Investors are concerned about the enormous long-term capital expenditures. Market analysts also warn that if the current artificial intelligence boom slows, the massive investments in new fabrication plants may not generate the expected returns.
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