Samsung and SK Hynix, with backing from the South Korean government, intend to invest $590 billion into expanding chip production capacity. The plan allocates 800 trillion won to four new factories in the country’s southwest, 81 trillion won to a packaging centre, and 30 trillion won over 15 years for next-generation chips. This initiative supports President Lee Jae Myung’s strategy to boost regional economic growth, driven largely by surging demand from AI data centres.
The timing addresses immediate supply constraints as memory prices are projected to rise sharply. Analysts from Jefferies Equity Research predict a 40 to 50 percent jump in Q3 2026, followed by another 30 to 40 percent increase in Q4. Further gains of 40 to 45 percent are expected for 2027, with relief not arriving until 2028 when new capacity comes online. Samsung and SK Hynix together control close to 80 percent of the global market for high-bandwidth memory chips, which AI workloads depend on. Rising costs are already pushing up prices for consumer electronics, with Apple hiking costs on Macs and MacBooks.
- Memory prices jump 40 to 50 percent in Q3 2026
- Further 30 to 40 percent increase expected in Q4
- Relief arrives in 2028 with new capacity online
