South Korea invests $550 billion to combat RAMageddon risk

South Korea's tech giants are embarking on a massive project to mitigate the global memory chip shortage, or as the industry calls it, the “RAMageddon” crisis. Samsung and SK Hynix have announced a $518 billion investment to build four new semiconductor plants in the country's southwest. This move aims to meet the unprecedented demand for chips driven by the rapid development of AI technologies. This is reported by Techcrunch.com reports .

At a presidential briefing held on Monday, it was noted that these investments are part of a broad national strategy covering AI, data centers, and physical AI sectors. According to the plan, in addition to memory chip production, another $52 billion will be spent on a High Bandwidth Memory (HBM) packaging hub in the central region. Furthermore, companies like SK, GS, and Naver will allocate $356 billion to build AI data centers by 2035.

The industry's new “three axes”

In a televised address, President Jae Myung Lee called semiconductors, physical AI, and data centers the “three axes” of South Korea's industry for the coming era. According to him, existing tech hubs near Seoul have reached their capacity limits, and it is now necessary to ensure economic balance by spreading investments to the country's remote regions. 2026 is expected to be the year South Korea becomes an “irreplaceable” force in the global market.

Currently, Samsung and SK Hynix (along with U.S.-based Micron) are benefiting significantly from record demand for memory chips required for AI systems. However, the global shortage known as “RAMageddon” could lead not only to price hikes but also to serious supply chain disruptions. Therefore, Korean manufacturers aim to expand production capacity in advance.

Companies' long-term strategy

Samsung plans to invest a total of $1.7 trillion over the next decade, with a significant portion directed toward new plants and AI centers in the Gwangju and Haenam regions. Company representatives stated that these areas were chosen due to favorable factors such as energy sources, water supply, and a skilled workforce. These figures could even exceed the $650 billion that U.S. giants like Alphabet, Amazon, Meta, and Microsoft are spending on AI infrastructure this year alone.

SK Group, for its part, has presented a $1.4 trillion long-term roadmap. In this plan, SK Hynix will expand semiconductor production, while SK Telecom will be responsible for building 15 GW AI data centers across the country. However, analysts are also noting the risks of such massive projects.

Building semiconductor plants takes years. The main risk is that by the time the plants are operational, market conditions may change or demand may drop, leading to oversupply and a sharp decline in prices. Nevertheless, the South Korean government and corporations appear willing to take the risk to maintain leadership in the future technology race.