SK Group, Samsung Electronics, Amkor to invest 896 trillion won in southwest Korea semiconductor and data center push

SK Group, Samsung Electronics and Amkor Technology will invest a combined 896 trillion won ($581 billion) to build a second major semiconductor production hub in southwestern South Korea.

The government plans to back the investments by drawing up a "Southwest Region Advanced Industry Promotion Strategy" to develop infrastructure and improve the investment environment.

The Ministry of Trade, Industry and Energy announced the plan Tuesday at the Southwest Region Advanced Industry Development Vision National Report, held at the Kim Dae-jung Convention Center in Gwangju.

The announcement followed the government's unveiling the previous day of a "three mega-projects" initiative centered on semiconductors, physical AI and AI data centers. Tuesday's event shared corporate investment plans and the government's forward strategy for the southwest region, which is set to become a new hub for the semiconductor industry.

SK Group said it will invest about 470 trillion won to build two main semiconductor memory fabs and a 1-gigawatt AI data center in the southwest region.

Samsung Electronics will invest 425 trillion won in the Honam region to construct two semiconductor memory fabs and a national AI computing center, among other facilities.

Together, the two companies will commit 800 trillion won to semiconductor memory fab construction, with an additional 95 trillion won going toward data centers and computing centers.

Amkor Technology will invest 1 trillion won to expand an advanced packaging fab in Gwangju.

The government said it will develop tailored infrastructure for the southwest region — designated S.WEST — in step with the companies' fab construction timelines.

Plans call for securing water supplies using dams and reclaimed wastewater, and rapidly building the power generation facilities and transmission networks needed to run the fabs.

The government also aims to cut the time needed to develop industrial complexes to within five years — roughly half the current timeline — and to cultivate the necessary talent through institutions such as a southern semiconductor engineering university.

A semiconductor special committee and a semiconductor innovation growth support unit will also be established under the Semiconductor Special Act, with the president serving as chair of the special committee.

The government additionally plans to designate at least one mega special zone in the southwest region under a mega special zone law currently being drafted, and to ease regulations there.

Infrastructure costs for power and water will be subsidized by up to 100 percent, and region-specific differential tax schemes for companies and workers will be introduced to encourage corporate investment and attract workers to settle outside the capital area.

A pilot model for a "corporate advanced city" — integrating large-scale mass production, technology demonstration and research functions — will also be developed in the southwest region.

The government will supply company-tailored sites and use fast-track procedures to shorten development timelines, while forming an industry-academia-research innovation hub linked to Chonnam National University's Campus Innovation Park, Gwangju's Urban Convergence Special Zone and the Gwangju Institute of Science and Technology.

Local governments will support living conditions covering transportation, housing, education and leisure, and connectivity between the advanced city and major transport networks — including the Honam high-speed rail line, expressways and Muan International Airport — will be strengthened.

SK hynix, Samsung Electronics and Amkor, along with the Ministry of Trade, Industry and Energy, the Ministry of Economy and Finance, the Ministry of Science and ICT, the Ministry of Land, Infrastructure and Transport, and the Ministry of Climate, Environment and Energy, signed an investment memorandum of understanding Tuesday for the promotion of advanced industries in the southwest region.

Under the agreement, the companies will advance their investments in the southwest region's advanced industries, while each ministry will actively pursue its responsibilities to build an advanced industry ecosystem.

"The 896 trillion won investment is on a scale that will redraw the economic map — not just of the southwest region, but of the entire country," a government official said. "We will provide unwavering support to ensure the companies' investment plans translate into real results."