Samsung Group is reportedly preparing to announce a 1,000 trillion won investment plan in South Korea, worth approximately $648 billion, over the next decade.
The proposed spending programme aims to transform South Korea’s artificial intelligence boom into a broader source of national economic growth.
Samsung Plans Major South Korea Investment
According to a report by the Maeil Business Newspaper, Samsung is expected to announce the investment commitment on Monday.
Senior executives from Samsung Electronics and SK Hynix are also expected to meet South Korean President Lee Jae Myung.
During the meeting, the companies will reportedly present investment plans focused on areas outside Seoul and the surrounding capital region.
Samsung’s proposed spending could include artificial intelligence data centres, batteries, displays and semiconductor production.
The report also suggested that Samsung may invest up to 300 trillion won in new chip factories in southwestern South Korea. However, the newspaper did not identify its sources.
Samsung and SK Hynix declined to comment on the report.
AI Chip Demand Drives Expansion Plans
South Korea has become one of the biggest beneficiaries of the global artificial intelligence boom.
The country plays a leading role in manufacturing advanced memory chips, which are essential components in AI servers and data centres.
Samsung Electronics and SK Hynix have benefited from rapidly growing demand for high-performance memory products.
Samsung Group is South Korea’s largest conglomerate. Samsung Electronics, one of the world’s biggest semiconductor manufacturers, is its most important business.
The group also includes battery producer Samsung SDI and information technology services company Samsung SDS.
Government Prepares Three Mega-Projects
South Korea’s presidential office said it would reveal three major national projects on Monday.
Policy adviser Kim Yong-beom said the initiatives would cover semiconductors, AI data centres and robotics.
The government and private industry are expected to present the plans jointly, with substantial investment anticipated across all three sectors.
Kim previously said that Samsung and SK Hynix may need to accelerate projects originally scheduled for the 2040s.
Some of those developments could be brought forward to the mid-2030s because AI-related memory demand is growing faster than expected.
Limited Space Around Seoul Creates Challenges
Most of South Korea’s semiconductor production is currently concentrated in and around the Seoul metropolitan area.
However, the region is facing shortages of land, electricity and water for further industrial expansion.
Kim warned that adding more manufacturing facilities around the capital could increase property prices and deepen economic inequality between Seoul and other regions.
The government is therefore encouraging major companies to direct more investment toward other parts of the country.
Questions Surround Southwestern Chip Hub
Some experts have questioned whether southwestern South Korea is the best location for a new semiconductor production centre.
Kim Tae-yun, a professor of public administration at Hanyang University, said finding enough skilled employees in the region could be extremely difficult.
He argued that access to qualified workers would be a major factor in determining whether the proposed project succeeds.
Kim also warned that the economic benefits could remain limited unless companies construct genuinely advanced semiconductor fabrication facilities.
Otherwise, the project could mainly support construction activity and local property prices without creating a lasting technology ecosystem.
Semiconductor Investment Becomes Political Issue
The location of South Korea’s next semiconductor hub became a major political issue ahead of the country’s June 3 local elections.
Candidates from several regions have promoted their areas as suitable destinations for future chip investment.
Proposals reported by local media have included a 500 trillion won semiconductor complex in the southwest, as well as expanded manufacturing clusters elsewhere.
The debate has intensified as President Lee’s government makes artificial intelligence a central part of its economic policy.
Opposition Questions Government’s Motives
Opposition lawmakers have accused the government of using semiconductor investment for political purposes.
They claim companies are being pressured to invest in southwestern regions that traditionally support the ruling party.
The controversy has emerged ahead of the ruling party’s leadership contest.
The opposition People Power Party argued that companies, rather than the president, should decide where semiconductor factories are constructed.
Local media have reported that Samsung Electronics is considering Gwangju as a possible investment location.
President Lee received approximately 85% of the vote in Gwangju and neighbouring South Jeolla during the June 2025 presidential election. Nationally, he secured 49.42%.
His approval rating has since fallen to 51%, its lowest point since he took office, according to Gallup Korea.
Existing Chipmaking Cities Fear Investment Losses
Plans to create new semiconductor clusters have also raised concerns in established manufacturing cities.
SK Hynix operates major production facilities in Icheon, where local government finances depend heavily on the company’s operations.
Some residents fear that a new semiconductor hub could lead SK Hynix to reduce production in the city.
Jo Jun-taek, the head of a local community group in Icheon, said much of the city’s tax revenue comes from the SK Hynix plant.
He warned that declining production could reduce employment, weaken public services and encourage residents to leave the area.
South Korea Seeks Balanced Regional Growth
President Lee has promoted a development strategy based on five regional hubs and three special self-governing provinces.
The initiative aims to reduce South Korea’s economic dependence on Seoul and distribute investment more evenly across the country.
The Seoul metropolitan region accounted for 52.8% of South Korea’s gross regional domestic product in 2024.
The economic gap is particularly visible in Gwangju, which has one of the country’s smaller regional economies and below-average output per person.
Supporters of the investment plan believe new AI, semiconductor and technology projects could create jobs and stimulate growth outside the capital.
However, the programme’s success may depend on infrastructure, access to skilled workers and whether companies can build competitive technology facilities in the selected regions.
