Samsung To Invest $230 Billion In New Semiconductor Factories In South Korea

Samsung Electronics announced today that it intends to invest roughly $230 billion in the construction of five new memory and foundry fabs in South Korea.

This is a significant step in line with the government's ambitious plan to establish a massive semiconductor hub in Yongin, on the outskirts of Seoul. Up until 2042, investments will be made.

The nation's action suggests it is shoring up the domestic semiconductor production line to secure the supply chain as other nations, including the U.S., Taiwan, Japan, and China, are frantically trying to ramp up their domestic chip manufacturing to offset risks of a disruption of the global supply chain as a result of rising tensions between the U.S. and China.

“It is expected that we would invest about 300 trillion KRW ($230 billion) in the chip-making cluster through 2042,” a spokesperson at Samsung said in an emailed statement to TechCrunch.

The government announced plans for five factories, but the Samsung spokeswoman would not confirm how many plants Samsung would establish in the semiconductor cluster or any other specifics.

The new project, which will invest $422 billion (500 trillion won) by 2026 to promote six essential technologies—semiconductors, electric car batteries, autonomous vehicles, robots, and displays—was presented on Wednesday by South Korea's Ministry of Trade, Industry, and Energy (MOTIE).

In order to create system semiconductors by 2026, the government said that it would set aside $260 billion (340 trillion won) exclusively for the chip industry, viewing semiconductors as "strategic economic support and national security assets."

According to the country's trade ministry, the mega semiconductor hub will also have a full value chain of chip-making processes from memory, foundries, and design houses to material suppliers and attract 150 domestic and international fabless companies as well as manufacturers of advanced chip materials and equipment.

The statement disclosed that the South Korean government wants to support high-tech industries by cooperating with businesses and plans to extend tax benefits for businesses engaged in advanced technology.

South Korea is not the only nation making significant efforts to expand its own manufacturing capabilities.

To resurrect its own semiconductor industry, Japan has been working with international semiconductor and chip equipment manufacturers.

Taiwan Semiconductor Corporation (TSMC), the largest contract chip manufacturer in the world, has been growing its production presence both domestically and abroad in the United States and Japan.

In addition to operating a foundry chip factory in Austin, Texas, Samsung has recently disclosed significant investment plans for the United States, including $17 billion set aside for the construction of a manufacturing site in Taylor, Texas. It is also thinking about spending $200 billion to build an additional 11 chip facilities in Texas.

Separately, Korea's Ministry of Science and ICT declared last month that it will invest $642.5 million to support the country's AI chip business.