According to a report by the Korea Economic Daily on June 29, Samsung Electronics and SK Hynix are preparing to jointly announce a combined 2,000 trillion won semiconductor investment plan for South Korea over the next ten years. Each company plans to build 4 to 5 semiconductor factories in the Gwangju area, creating a "semiconductor mega-cluster" on the western side of the Korean Peninsula. This plan is the highest investment amount record in the history of Korean corporations, and is a core pillar of President Lee Jae-myung's flagship industrial strategy.
Details of Samsung and SK Hynix's factory deployment in Gwangju and Chungcheong Province
According to the Korea Economic Daily report, each company's investment scale is about 1,000 trillion won (about $65 billion), with the following deployments:
Samsung Electronics: 4 to 5 wafer fabs in Gwangju, packaging plant in South Chungcheong Province
SK Hynix: 4 to 5 wafer fabs in Gwangju, NAND expansion plant in North Chungcheong Province
Gwangju is a key deployment city for both companies. NH Investment & Securities noted that the directly benefiting sectors from this investment are not limited to semiconductors themselves; three major industrial chains—special power equipment, power grid infrastructure, and construction—will also benefit directly.
Market reaction of KOSPI and individual stocks after the investment plan news
After the news was revealed, the KOSPI composite index once fell more than 3%, Samsung Electronics fell about 5%, and SK Hynix fell about 4.5%. The market interpreted this as the large-scale investment plan implying increased short-term capital expenditures, which would weigh on the companies' near-term earnings.
Eugene Investment & Securities analyst Huh Jae-hwan said: "The core issue of the Korean domestic stock market is the lack of competitive alternative sectors besides semiconductors. This large-scale industrial project exactly fills that gap."
Comparison of 2,000 trillion won investment scale with TSMC's capital expenditure figures
TSMC's 2026 capital expenditure is 1.6 trillion New Taiwan dollars (about $51 billion). The scale of each of Samsung and SK Hynix's 1,000 trillion won (about $65 billion) over ten years is close to TSMC's total investment over five years; the combined 2,000 trillion won scale exceeds estimates of TSMC's ten-year investment plan. The Korea Economic Daily report noted that this plan is the highest investment amount record in the history of Korean corporations.
Frequently Asked Questions
Why did Samsung and SK Hynix choose Gwangju as the core deployment location for new factories?
According to analysts cited in the report, Gwangju's geographical location and government subsidy policies make it a preferred area for the western semiconductor corridor. Each company plans to build 4 to 5 factories in Gwangju, making it the region receiving the largest investment scale from this 2,000 trillion won plan in a single city. NH Investment & Securities pointed out that the factory construction in Gwangju and surrounding areas will drive peripheral industrial chains such as power equipment and grid infrastructure.
Why did KOSPI and individual stocks fall after the investment plan news?
The market's initial reaction was that a large CapEx plan means near-term corporate earnings pressure, causing KOSPI to fall more than 3%, and Samsung Electronics and SK Hynix to fall about 5% and 4.5%, respectively. Eugene Investment & Securities analyst Huh Jae-hwan pointed out that the long-term significance of such large-scale industrial investment for the Korean domestic stock market is to fill the competitiveness gap outside semiconductors; the short-term sell-off reflects CapEx concerns, not a rejection of the plan itself.
What is the combined market share of Samsung and SK Hynix in the global memory market?
According to data cited in the report, Samsung and SK Hynix together account for over 70% of the global DRAM market and over 50% of the NAND market. The scale of this 2,000 trillion won expansion plan exceeds estimates of TSMC's ten-year investment plan, indicating the two companies' long-term strategic direction to consolidate their leading positions in the memory market through scale advantages.
