South Korea’s semiconductor heavyweights are about to get a whole lot bigger. Samsung Electronics and SK Hynix are in active discussions with the South Korean government to invest in two new semiconductor fabrication sites, targeting the country’s southwest Honam region as the location for a second major chip cluster.
The negotiations, confirmed on June 24, represent one of the most significant semiconductor expansion efforts in South Korean history. Both companies are racing to scale up production capacity as AI-driven demand for advanced chips continues to outpace supply.
Why South Korea is looking south
Existing clusters in northern regions like Pyeongtaek and Yongin in Gyeonggi Province are hitting space constraints. The Gwangju area in the Honam region is emerging as the leading candidate. Market speculation points to Samsung potentially establishing an advanced packaging facility there, while SK Hynix is evaluating back-end operations in the same region. Both companies have been careful to note that plans remain under evaluation.
Construction timelines for this second cluster could be accelerated by more than a decade compared to original projections, with targeted completion now falling somewhere between 2034 and 2035.
