Samsung commits $230B for five new chip plants in South Korea

Samsung Electronics said today that it plans to invest approximately $230 billion (300 trillion won) to build five new memory and foundry fabs in South Korea -- a big move in line with the government's ambitious aim to set up a mega semiconductor hub in Yongin, on the outskirts of Seoul. The investments will be made through 2042.

The country's move indicates that it is shoring up the domestic semiconductor production line to secure the supply chain as other countries, including the U.S., Taiwan, Japan and China, are scrambling to ramp up their domestic chip manufacturing to offset risks to global supply chain disruption due to 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. Although the government, in a statement, spoke of plans for five plants, the Samsung spokesperson declined to comment on the number of plants Samsung will set up in the semiconductor cluster, as well as other details.

South Korea's Ministry of Trade, Industry and Energy (MOTIE) unveiled Wednesday its new project to invest $422 billion (500 trillion won) by 2026 to promote six core technologies: semiconductors, electric vehicle batteries, autonomous vehicles, robots, displays and biotechnology. The government said it would earmark $260 billion (340 trillion won) specifically for the chip space to develop system semiconductors by 2026, considering "semiconductors as strategic economic support and national security assets."

The mega semiconductor hub also will have a whole value chain of chip-making processes from memory, foundry and design houses to material suppliers and attract 150 domestic and global fabless companies and advanced chip materials and equipment makers, per the announcement by the country's trade ministry. The South Korean government wants to foster high-tech industries by working with corporations and intends to offer expanded tax breaks for companies in the advanced tech space, the statement says.

South Korea is not the only country to be making big moves to build out its own manufacturing operations.

Japan has been partnering with global semiconductor and chip equipment makers to revive its own semiconductor industry. The world’s largest contract chip producer, Taiwan Semiconductor Company (TSMC), also has been expanding its manufacturing footprint both domestically and overseas in the U.S. and Japan.

Samsung already operates a foundry chip facility in Austin, Texas, and it has recently announced additional investment plans for the U.S.: $17 billion earmarked to build a manufacturing facility in Taylor, Texas. In addition, it is considering investing $200 billion to set up a further 11 chip plants in Texas.

Separately, Korea's Ministry of Science and ICT announced last month to boost its AI chip industry with $642.5 million.