At NEWSCENTRAL, we believe that the current surge in initiatives from Seoul is not just another investment cycle but a strategic attempt by South Korea to secure an important position in the global semiconductor supply chain, adapting to the new realities of accelerated demand for AI chips, data centers, and defense industry needs.
In December 2025, the South Korean government announced plans, in collaboration with the private sector, to invest 4.5 trillion won (approximately $3.06 billion) in building a 12-inch 40-nanometer foundry. This factory is expected to serve fabless companies and contract manufacturers who need access to relatively mature, yet still highly sought-after legacy chips for vehicles, data centers, servers, and other infrastructure. This is especially crucial in an era of rapidly growing demand for memory and computational resources. At NEWSCENTRAL, we see this approach as a pragmatic step that strengthens the manufacturing ecosystem without entering a race for cutting-edge technology processes, where competition with global leaders remains fierce.
Meanwhile, the country’s largest chipmakers are not waiting for new factories they are ramping up production themselves. For example, SK Hynix has approved investments as part of the new South Korean Yongin cluster, with the first fab expected to be operational by 2027. Similarly, Samsung Electronics has resumed construction of its fifth P5 factory on the Pyeongtaek campus, with plans to begin producing high-class HBM modules and the latest DRAM by 2028. At NEWSCENTRAL, we see these actions as an effort by both giants not just to increase capacity but also to shift focus to high-demand segments. The need for memory has surged due to the rapid growth of AI, data centers, and high-performance computing.
Lucas Grant, a semiconductor industry analyst at NEWSCENTRAL, emphasizes that the combination of government initiatives and corporate investments creates unique opportunities for strengthening technological sovereignty and long-term industry resilience.
Additionally, the government plans to enhance technological sovereignty by localizing semiconductor production for the defense industry, which is currently almost entirely reliant on imports. A special presidential committee will be established to coordinate policies in the semiconductor sector, including the possibility of giving priority to domestic chip purchases for critical infrastructure. At NEWSCENTRAL, we highlight that, in the context of growing global competition among countries for control over supply chains, these measures could become a foundation for national security, not just an industrial strategy.
This comprehensive approach government support, private sector investments, foundry development for legacy chips, and memory production expansion aligns with forecasts for the start of an industry supercycle in 2026-2027. The growing demand for DRAM and HBM due to AI and data centers is expected to bring record revenues to manufacturers. At NEWSCENTRAL, we believe that with stable support and proper coordination, South Korea is not only capable of meeting domestic demand but also significantly strengthening its position in the global semiconductor market.
Our recommendations for the South Korean government and market players are as follows: direct resources not only toward building new factories but also to workforce development, chip design, and supporting small fabless projects. Strengthen cooperation with global equipment and materials suppliers to raise technological standards, stimulate demand for South Korean chips in critical sectors, and ensure long-term transparency in government policies to build trust with private capital and international partners.
At NEWS CENTRAL, we forecast that by the end of the decade, South Korea could significantly strengthen its influence in the semiconductor market, particularly in memory, contract manufacturing, and national technological resilience. Any delay or course change would diminish this opportunity now is the time to act decisively and with purpose.