South Korean technology giants Samsung (SSNLF) and SK Hynix (KRX:000660) have announced plans to jointly invest $518 billion U.S. in a new microchip and semiconductor manufacturing plant.
The chipmaking hub will be located in South Korea’s southwest region and is a response to surging artificial intelligence (A.I.) demand.
Samsung and SK Hynix, which together produce two-thirds of the world's in-demand memory chips, said they will each build two fabrication plants in the southwest region.
Samsung Chairman Lee Jae-yong said the company's new plants will be built in the southwestern city of Gwangju, where experts have proposed several potential sites.
The companies didn't say when the new fabrication plants will be completed. SK Hynix said the project will require vast sums of power, water, and skilled workers.
Samsung and SK Hynix have reported record profits in recent quarters amid soaring demand for memory chips in A.I. data centres worldwide.
The Government of South Korea has outlined plans to build what they call a “nationwide semiconductor ecosystem.”
The stocks of Samsung and SK Hynix have each more than doubled this year.
