$1.3 trillion "AI gamble"! Samsung joins hands with SK Hynix to announce the largest investment in South Korean corporate history, as South Korea strives to build a "semiconductor AI empire" at a historic turning point.

On June 29th, South Korean President Lee Jae-myung will host a "Republic of Korea Great Leap Three Super Projects National Announcement Conference" at the Blue House State Guesthouse. Samsung Electronics Chairman Lee Jae-yong and SK Group Chairman Choi Tae-won will both attend, where they are expected to jointly announce a groundbreaking investment plan that will shake the global capital markets - the two major conglomerates are set to invest nearly 200 trillion Korean won (approximately 1.3 trillion US dollars) over the next ten years in South Korea. This figure far exceeds market expectations, with previous reports in the Korean media suggesting that just the investment from Samsung alone could surpass 100 trillion Korean won (approximately 646 billion US dollars). By 2025, South Korea's nominal GDP is estimated to be around 1.87 trillion US dollars, and the investment from these two major conglomerates would account for over 70% of the country's annual GDP. The President's Office Policy Director, Kim Yong-fan, hinted in an interview last Friday that the data to be announced on June 29th will be "extremely unusual". President Lee Jae-myung himself described this investment as a "historic achievement" and a "policy measure that could change the fate of South Korea". Investment Blueprint: Breaking the monopoly of the capital area, Gwangju emerges as the biggest winner The core strategic intent of this investment plan is clear - to break the long-standing industrial concentration model centered around the capital area of South Korea and make large-scale investments in the southwest region centered around Jeolla Province. The semiconductor sector is the absolute focus of this investment. Samsung Electronics will use the former Air Force base in Gwangju as the core site for a semiconductor wafer fabrication plant, with plans to build 4 to 5 wafer plants. It is estimated that Samsung's investment in the new semiconductor project alone will reach 600 trillion Korean won, far exceeding the scale of the Pyeongtaek cluster in Gyeonggi Province. In addition, Samsung also plans to build a chip packaging plant in Chungcheongnam-do. SK hynix will also build 4 to 5 wafer plants in Gwangju, with a similar investment scale of 600 trillion Korean won. SK hynix also plans to expand its NAND flash memory plant in Chungcheongbuk-do. With the cost of a state-of-the-art wafer fabrication plant estimated at about 60 trillion Korean won, the investment from Samsung alone in the Gwangju area is enough to support the construction of four to five advanced factories, making it comparable in scale to Samsung's current global largest semiconductor manufacturing base in Pyeongtaek. In the field of AI data centers, Samsung will continue to expand its computing power cluster in Chungcheongnam-do, leveraging its storage chip advantages to establish AI computing infrastructure. In the energy storage battery sector, Samsung SDI will increase investments in the production lines of next-generation power and energy storage batteries. In the display panel sector, Samsung Display will continue to invest in next-generation OLED, Micro LED, and other new display technologies. On the government side, officials from the Ministry of Trade, Industry and Energy, the Ministry of Science and ICT, the Ministry of Land, Infrastructure and Transport, and the Climate, Environment and Employment will outline supporting policies covering basic infrastructure such as power supply and water supply. Deputy Prime Minister and Minister of Strategy and Finance of South Korea, Yoo Yeon-je, stated that the government will "spare no effort to support corporate investments in local areas" and pointed out that without strong government support commitments, "companies may have to choose to invest overseas". Strategic Background: Lee Jae-myung's "Five Poles Three Specialties" balanced development blueprint core move This investment plan is a key component of President Lee Jae-myung's government's "Five Poles Three Specialties" national balanced development strategy. The so-called "Five Poles Three Specialties" refers to dividing the country into five major central regions (Capital Circle, Southeast Circle, Daqing Circle, Central Circle, Hunan Circle) and three special autonomous provinces (Gangwon Province, North Jeolla Province, Jeju Province), and promoting development in each region according to its unique characteristics. For a long time, the production facilities of South Korea's semiconductor manufacturers have been highly concentrated in the Gyeonggi Province area around Seoul (Pyeongtaek, Hwaseong, Yongin), causing severe regional imbalance. Successive South Korean governments have urged companies to expand their production and research facilities beyond the capital area, and this investment is the concentrated realization of this long-standing policy direction. Lee Jae-myung previously stated: "To overcome the one-pole system of the capital area, it is essential to achieve the diversification of strategic industries." The South Korean government has positioned this investment as the core project of the "Semiconductor Industry Belt construction in the southern region". Three Super Projects: Semiconductor, AI Data Center, Physical AI The core architecture of this investment plan is named "Three Super Projects" - semiconductor, AI data center, Physical AI. These three areas are not isolated layouts, but are organically linked through the strategic concept of "Project Trinity". Semiconductor: "Gigafactory" in Hunan Cluster The top priority in the semiconductor sector is to create a new semiconductor industry cluster in the Gwangju and South Jeolla areas. Specific plans include: Samsung Electronics: Selecting the former Air Force base in Gwangju to build 4 to 5 wafer fabrication plants (Fab). The investment in the new semiconductor project alone is expected to reach 600 trillion Korean won. SK hynix: Similarly, constructing 4 to 5 wafer plants in Gwangju, with a similar investment scale as Samsung. Based on current cost estimates, the investment in a state-of-the-art semiconductor wafer fabrication plant is about 60 trillion Korean won. The investment in just the new factories in the Gwangju cluster is expected to reach around 700 trillion Korean won. In addition, Samsung also plans to build a chip packaging plant in Chungcheongnam-do, and SK hynix will expand its NAND flash memory plant in Chungcheongbuk-do. AI Data Center: Computing hub in Chungcheong-Gangwon Circle The second pillar is to build GW (GIGA) level large-scale AI data centers in the Chungcheong Circle and Gangwon Province. The cost of a GW-level data center is approximately 40 to 50 trillion Korean won. Physical AI: Siasun Robot & Automation Industry Cluster in Yeongnam Circle The third pillar is to focus investments in Physical AI in the Yeongnam Circle, including Siasun Robot & Automation, autonomous driving, smart factories, and other AI technologies that interact with the physical world. The three regions - Hunan (semiconductor), Chungcheong (data center), Yeongnam (Physical AI) - form the "Cutting-edge Industry Three-axis outside the Capital Circle" of South Korea. This is a national strategic layout based on regional balanced development in the AI era industry restructuring. Financial Feasibility to support massive investments? The 200 trillion won investment scale has raised high concerns about the financial feasibility. However, from the current profit trajectory of Samsung and SK hynix, this scale is not a pie in the sky. Samsung Electronics' operating profit in 2025 has reached 43.6 trillion Korean won, and in the first quarter of 2026, it skyrocketed to 57.2 trillion Korean won, an increase of 756% year-on-year. Based on the ongoing explosive demand for High Bandwidth Memory (HBM), Goldman Sachs predicts that Samsung's operating profit in 2026 will increase more than 8 times year-on-year, and the return on equity (ROE) is expected to reach a record high of 52%, with its HBM revenue set to rise to about $44 billion in 2027. During the semiconductor super prosperity cycle from 2026 to 2028, institutions predict that Samsung Group's cumulative operating profit will exceed 150 trillion Korean won. From a financial perspective, the scale of investing 100 trillion Korean won over the next ten years is completely within the manageable range. SK hynix is also performing impressively. The company's competitiveness in High Bandwidth Memory (HBM) technology has pushed its market value past 100 trillion Korean won last month, and in just over a month, it has exceeded 200 trillion Korean won. SK's consolidated net profit in the first quarter of 2026 reached 40.346 trillion Korean won (approximately 178.7 billion RMB), a fivefold increase from the same period last year, and its operating profit margin also reached a historical high of 72%. It is worth noting that SK hynix also plans to issue Depositary Receipts (DRs) on the NASDAQ to raise about 45.45 trillion Korean won (294 billion US dollars) for expanding its AI production capacity. This investment is not a single project, but a summary of the future investments of various subsidiaries of the two major conglomerates in South Korea's cutting-edge industries over the next ten years. Led by Samsung Electronics, the Samsung Group will collaborate with subsidiaries such as Samsung SDI, Samsung Display, and others. The SK Group, on the other hand, is led by SK hynix and will coordinate with other business sectors within the group. Industry Outlook: Ambition and Reality of South Korea's Semiconductor Empire From an industrial strategic perspective, this investment marks South Korea's historic bet in the global AI competition. As the world's largest memory chip manufacturer, Samsung is facing fierce competition from giants such as SK hynix and TSMC. This massive investment is expected to consolidate its leading position in the memory and logic chip foundry markets through capacity expansion and technological upgrades.