Samsung Electronics and SK Hynix have announced a massive joint investment of about $518 billion to build a new semiconductor manufacturing hub in southwestern South Korea.

The project, supported by President Lee Jae Myung, aims to expand production beyond the crowded Seoul region and strengthen the country’s leadership in AI-driven chip demand.

Each company will construct new fabrication plants, though timelines have not yet been specified, and officials say the project will require major infrastructure in power, water, and skilled labor.

The investment comes as both firms report record profits due to surging global demand for memory chips used in AI technologies and data centers, the AP has reported.

The government also plans to develop a nationwide semiconductor ecosystem to support chips, AI infrastructure, and related industries.