Samsung and Hyundai Expand Domestic Investment Plans

Samsung to build new chip production line amid AI boom
Hyundai, shipbuilders also announce investment plans
South Korea finalises U.S. trade deal including $350 bln U.S. investments
President Lee Jae Myung raises worries about domestic sector weakening

Samsung Electronics, Hyundai Motor, and other major South Korean manufacturers have announced significant domestic investment plans following the finalization of a U.S.–South Korea trade agreement. Concerns had emerged that increased U.S.-bound investments might reduce focus on local manufacturing. In response, Samsung confirmed it will add a chip production line at its Pyeongtaek facility, part of a broader five-year investment strategy totaling 450 trillion won ($310.79 billion). The announcement coincided with a meeting between President Lee Jae Myung and business leaders, where the importance of balancing overseas and domestic investment was emphasized.

Semiconductor Expansion and Market Dynamics

Samsung’s new production line, known as the P5 plant, will focus on memory chips for traditional and AI servers. The facility is part of the world’s largest semiconductor complex and had previously faced delays due to weakened demand and oversupply in the smartphone and PC segments. Mass production is scheduled to begin in 2028, with additional infrastructure investments planned to support expanded operations. Rising global demand for AI chips has tightened supply, prompting Samsung to increase memory chip prices by up to 60 percent in recent months.

The company stated that securing production capacity in advance is essential to meet mid- and long-term market shifts. Semiconductor prices have surged as manufacturers race to meet AI-related demand. Samsung’s move reflects a strategic effort to maintain competitiveness while supporting domestic industry. The expansion is expected to contribute to job creation and strengthen South Korea’s position in the global chip market.

Broader Industry Commitments

Hyundai Motor Group also revealed plans for domestic investments totaling 125.2 trillion won between 2026 and 2030. Shipbuilders Hanwha Ocean and HD Hyundai joined the initiative with their own investment announcements. President Lee urged companies to consult with the government to maximize the benefits of the $350 billion U.S. investment package. He stressed the need to ensure that domestic growth remains a priority despite international commitments.

Samsung Electronics Chairman Jay Y. Lee affirmed the company’s intention to support small and medium-sized enterprises and venture firms through its investment strategy. The focus on domestic development aims to balance global expansion with local economic stability. These commitments signal a coordinated effort to reinforce South Korea’s industrial base amid shifting global trade dynamics. The government and private sector appear aligned in promoting sustainable growth at home.

Strategic Positioning in the AI Era

The global acceleration of AI adoption has reshaped demand for advanced semiconductors. Samsung anticipates continued growth in this sector and is positioning itself to respond effectively. By investing in domestic production, the company aims to maintain supply chain resilience and technological leadership. The Pyeongtaek expansion is a key component of this strategy, reflecting broader trends in industrial planning.