Samsung, SK Hynix eye huge spending push on AI expansion

SEOUL: Samsung Electronics and SK Hynix are preparing to announce hundreds of billions of dollars worth in new investments on Monday, according to South Korean media reports this week.

Samsung Group is set to unveil a 1,000 trillion won (US$646 billion) spending package over the next decade, Maeil Business Newspaper reported Friday, in what would be the largest such plans in the country’s history.

Top executives from Samsung and SK Hynix, South Korea’s two most valuable companies and the world’s leading memory chipmakers, are expected to attend a presidential briefing at the Blue House at the start of next week, the report added.

Republic of Korea” on Monday, a senior Blue House spokesperson said Thursday, adding that further details will be provided that day. In the buildup to the event, Maeil and other Korean newspapers have reported that senior executives from the memory companies met with the president to discuss regional investment plans.

South Korean presidential policy chief Kim Yong-beom said “very unusual” figures will be announced on June 29 when the president hosts a meeting to discuss investment plans by big companies.

The event will focus on key sectors such as semiconductors, AI data centres and physical AI, Kim said in an interview on a YouTube programme on Friday.

Samsung and SK Hynix were caught up in a broad selloff of semiconductor names on Friday, following Apple Inc price hikes and a report about OpenAI potentially delaying its public listing.

Both companies slid more than 9% on the Korean exchange, with Apple’s higher pricing adding to concern about costs hurting consumer demand and slowing the rally in memory-chip makers.

“We doubt that the leading Korean memory manufacturers’ impending capex announcements are what is driving share prices down today,” said Homin Lee, a strategist at Lombard Odier in Singapore. “If anything, capacity expansion is essential to their continued dominance in market share and to demand stability over the long run.”

Samsung and SK Hynix representatives declined to comment on the reports.

Icheon-based SK Hynix has signalled plans to spend to expand production capacity and meet runaway demand for memory from the artificial intelligence industry and the broader tech sector.

The company plans a US$29 billion US listing, after Chairman Chey Tae-won said earlier this month that he intends to double capacity over the next half decade.

Suwon-based Samsung has, like SK Hynix, reported record sales and profits in recent quarters on booming demand for memory, while showing interest in playing a bigger role in the global AI industry.

Executive chairman Jay Y Lee is expected to unveil a data centre investment plan in Asan, South Chungcheong Province, on July 2, Maeil reported.