- Samsung to build new chip production line amid AI boom
- Hyundai, shipbuilders also announce investment plans
- South Korea finalizes U.S. trade deal including $350 bln U.S. investments
- President Lee Jae Myung raises worries about domestic sector weakening
Samsung Electronics, Hyundai Motor and other major South Korean manufacturers on Sunday unveiled domestic investment plans, as a U.S. trade deal raised concern investment in the U.S. could weaken manufacturing at home.
Samsung Electronics will add a chip production line at its plant in the South Korean city of Pyeongtaek to meet rising demand amid the global boom in artificial intelligence, as part of the parent group’s US450 trillion won (US$310.79 billion) investments at home over the next five years, the company said.
Samsung’s announcement came as South Korean President Lee Jae Myung held a meeting on Sunday with the country’s business leaders, after a U.S. trade deal including a South Korean promise to invest US$350 billion in U.S. strategic sectors was finalized on Friday.
“There are concerns that domestic investment might shrink as U.S.-bound investments strengthen,” Lee said at the meeting, as he asked companies to consider domestic investments more.
The president also asked companies to consult with the government to make good use of the US$350 billion investment package for their overseas investments.
“Samsung will raise domestic investment, create quality jobs for young people and make even more efforts for a win-win with small and medium-sized, as well as venture companies,” Samsung Electronics Chairman Jay Y. Lee said.
At the meeting, Hyundai Motor Group 005380.KS announced domestic investments worth 125.2 trillion won from 2026 to 2030, while shipbuilders Hanwha Ocean 042660.KS and HD Hyundai 267250.KS also unveiled investment plans.
The new Samsung factory, which will make memory chips, will cater to demand for traditional and AI servers, a spokesperson said. Semiconductor prices are surging, as the global rush by chipmakers to produce AI chips tightens supply of those needed for smartphones, computers and servers.
Samsung Electronics this month raised prices of certain memory chips by as much as 60 per cent compared to September, two people with knowledge of the hikes have told Reuters.
The new production line, or the P5 plant, part of the world’s biggest chip complex, had been delayed since late 2023, as demand slowed for chips for smartphones and PCs, and oversupply, according to public filings of its builder, Samsung C&T 028260.KS.
Mass production at the P5 plant will begin in 2028, the South Korean chipmaker said, adding that it also plans additional infrastructure investments to support expanded operations.
“With the global AI era entering full scale, Samsung Electronics anticipates a mid- to long-term expansion in demand for memory semiconductors. In order to respond promptly to market changes, the company intends to secure production lines in advance,” Samsung Electronics said in a statement.
Reporting by Jihoon Lee, Heekyong Yang and Hyunjoo Jin; Editing by Kate Mayberry and William Mallard