South Korean conglomerate Samsung has announced a significant investment plan, allocating $310 billion over the next five years, primarily in technologies driving artificial intelligence. This move aims to cater to the increasing global demand for AI-powered solutions. As a leading manufacturer of memory chips, Samsung Electronics, the group’s flagship company, is well-positioned to support the AI industry’s infrastructure.
South Korea is home to several key players in the global semiconductor market, including SK hynix, another major memory-chip maker. The investment package includes the construction of a new semiconductor facility, Pyeongtaek Plant 5, designed to meet the growing demand for memory chips. This new plant is expected to play a strategic role in both the global semiconductor supply chain and South Korea’s domestic chip ecosystem once it begins operations in 2028.
In addition to the semiconductor facility, Samsung SDS, the group’s IT and logistics arm, plans to establish two AI data centers in South Jeolla and Gumi. While details about these data centers are limited, they are expected to contribute to the country’s growing AI infrastructure.
Samsung Group, South Korea’s largest chaebol, is a network of affiliated companies with complex cross-shareholdings under the Samsung brand. The $310 billion investment plan also includes projects unrelated to AI, such as the exploration of a domestic production line for next-generation batteries, including all-solid-state batteries, by Samsung SDI, the company’s electric-vehicle battery affiliate.
The AI boom has significantly benefited Samsung Electronics and SK hynix, with their high-performance memory chips becoming essential for AI computing. Samsung Electronics reported a more than 30% year-on-year increase in profit in the third quarter, driven by AI-fuelled demand. As AI-related spending soars worldwide, concerns about an AI market bubble have emerged, drawing parallels with the dot-com boom that imploded at the turn of the millennium.
The investment announcement comes after the South Korean government pledged to triple spending on artificial intelligence next year. President Lee Jae Myung has vowed to make the country one of the world’s top three AI powers, behind the United States and China. With this significant investment, Samsung is poised to play a crucial role in driving South Korea’s AI ambitions and cementing its position in the global technology landscape. The company’s plans are expected to have a significant impact on the development of AI technologies and the growth of the global semiconductor market.