Samsung Electronics, SK Hynix, and the South Korean government announced on Monday plans to invest about $590 billion to build a new chip complex, including four chipmaking plants, with the aim of doubling the country's dynamic random access memory (DRAM) production capacity in five years. The investment pledges are part of the president's 'Three Mega Projects for the Great Leap Forward' initiative aimed at building up the country's capabilities in semiconductors, AI data centers, and robotics. The announcement comes as surging demand for high-bandwidth memory (HBM) chips continues to outstrip supply amid aggressive AI infrastructure spending by cloud companies and technology firms.
Samsung and SK Hynix Commit 800 Trillion Won to Four New Chipmaking Plants
Samsung and SK Hynix plan to build two chipmaking plants apiece for 800 trillion won ($518 billion), the country's industry minister said Monday. Shares of the two companies recouped losses from earlier in the day in Seoul as the official announcement was made. The Kospi closed down just 0.2%, recovering from a 3.4% drop earlier.
DRAM ETF Declines 1.4% in U.S. Premarket Trading
The Roundhill Memory ETF (DRAM) extended its losses, down 1.4% in premarket trading on Monday. Samsung, SK Hynix, and U.S. memory giant Micron are the top three holdings of DRAM. In the U.S., investors sold chip stocks and booked profits on Friday, after fresh record-hitting rallies in major names following incredible results from Micron.
SK Hynix Prepares Nasdaq Listing Next Month
SK Hynix, which is preparing to list its shares on Nasdaq next month, is the dominant supplier of advanced HBM chips to Nvidia. Samsung and SK Hynix have become key beneficiaries of the AI boom, as surging demand for high-bandwidth memory (HBM) chips continues to outstrip supply amid aggressive AI infrastructure spending by cloud companies and technology firms.
Stocktwits Sentiment for DRAM Reaches Extremely Bullish
On Stocktwits, the retail sentiment for DRAM rose over the weekend to 'extremely bullish' as of early Monday, while message volume for the ETF more than doubled in the past week. A trader wrote: "SK Hynix & Samsung are still dropping. Samsung Electronics and SK Hynix each unveiled major chip investment plans Monday at a presidential briefing in Seoul. Neither announcement stopped their stocks from falling sharply."
Last week, regulators stepped in twice to pause trading on the Kospi and steady nerves after stocks dropped sharply.
FAQ
What did Samsung and SK Hynix announce on Monday?
Samsung Electronics, SK Hynix, and the South Korean government announced plans to invest about $590 billion to build a new chip complex, including four chipmaking plants, with the aim of doubling the country's DRAM production capacity in five years.
How much will Samsung and SK Hynix invest in the new chipmaking plants?
Samsung and SK Hynix plan to build two chipmaking plants apiece for 800 trillion won ($518 billion), according to the country's industry minister.
When is SK Hynix planning to list its shares on Nasdaq?
SK Hynix is preparing to list its shares on Nasdaq next month.
