Home > Business > Economy

Chip giants’ spending spree lifts hopes across Korea’s semiconductor supply chain

Published: 19 Nov. 2025, 13:04 Updated: 19 Nov. 2025, 17:38

A view of Samsung Electronics’ Pyeongtaek plant in Gyeonggi, the world’s largest semiconductor plant. [SAMSUNG ELECTRONICS]

Korea’s two largest chipmakers have set off a wave of optimism across the semiconductor supply chain, as massive new investments by Samsung Electronics and SK hynix begin to ripple through construction sites, equipment suppliers and local economies.

A representative at a semiconductor equipment maker that supplies both companies said the mood shifted sharply after the announcements made earlier this week.

“People are saying a real boom is finally here,” the source said in a call with the JoongAng Ilbo on Tuesday. The company supplies equipment to both Samsung Electronics and SK hynix.

"We can’t expand capacity that quickly, so if both companies place orders at once, scheduling deliveries will be difficult. But that’s a good problem for us to have."

Across Korea’s materials, components and equipment sector, suppliers are preparing to raise output. Construction is accelerating in Pyeongtaek and Yongin in Gyeonggi, where chipmakers are building new production complexes, and some watchers say they expect the activity to lift local economies.

Samsung restarts fab project

Samsung recently resumed construction on its so-called P5 project, which the company expects will cost more than 60 trillion won ($41 billion), according to industry sources. Samsung is building a semiconductor campus in Pyeongtaek that spans 289 million square meters (71,413 acres).

The first complex includes four foundries, from P1 to P4, and the second will house two lines, including the newly funded P5. Samsung aims to begin operations at P5 in 2028. The fab will produce sixth-generation 10-nanometer-class dynamic random-access memory (DRAM), known as 1c, and sixth-generation HBM4.

Industry watchers say Samsung could add foundry production depending on market conditions.

SK hynix increases Yongin investment

A view of the Yongin semiconductor national industrial complex construction site in Wonsam-myeon, Cheoin District, Yongin, Gyeonggi, is seen on May 23, 2024. [YONHAP]

SK hynix raised its estimated investment in the Yongin semiconductor national industrial complex to 600 trillion won, up from the 120 trillion won it first announced.

The Yongin city government recently approved a revision to the industrial complex plan that increases the ratio of the floorspace to site area from 350 percent to 490 percent and raises the maximum building height from 120 meters (131 yards) to 150 meters. The change will expand cleanroom space by roughly 50 percent, which is expected to increase construction and equipment spending.

The company completed site preparation for the first phase of the cluster in February and has begun building the fab. Crews are also pushing ahead with earthwork for phases two through four.

"The land development phase has reached 67 percent, slightly ahead of schedule, and the power and water infrastructure is 88 percent complete," said Song Jong-uk, head of the special-purpose company overseeing the project.

"We originally planned to finish phases two through four by February 2027, but we are pushing to bring forward completion of phase two by six months to a year," Song added.

Race for labor, suppliers anticipate orders

President Lee Jae Myung presides over a meeting with the private sector on follow-up measures to Korea-U.S. tariff negotiations at the presidential office in Yongsan, central Seoul, on Nov. 16. Seven conglomerate leaders attended the session: Samsung Electronics Executive Chairman Lee Jae-yong, SK Group Chairman Chey Tae-won, Hyundai Motor Group Executive Chair Euisun Chung, LG Group Chairman Koo Kwang-mo, HD Hyundai Chairman Chung Ki-sun, Celltrion Chairman Seo Jung-jin, and Hanwha Group Vice Chairman Yeo Seung-joo. [JOINT PRESS CORPS]

With both megaprojects advancing, demand for labor has surged. Online recruitment boards for the Pyeongtaek and Yongin construction sites saw a new post every one to two minutes on Tuesday morning. Labor brokers pitched openings with phrases such as “beginners welcome, no experience needed, utilities fully covered and lodging provided, daily wage 150,000 won.”

"About 1,000 people are currently working on civil engineering, and several thousand are on the fab site," Song said. "At the peak of construction, we expect 15,000 to 20,000 workers."

Another equipment industry representative said companies have not yet felt a surge in orders, even though the memory market’s recent rebound boosted earnings for both Samsung and SK hynix.

“Despite the memory supercycle in the second half of the year, equipment orders haven’t surged, so the impact hasn’t fully hit us,” the source said. “But when capital spending ramps up, the materials, components and equipment sector will see direct benefits. We are preparing by increasing sales efforts and hiring.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK HAE-LEE, LEE GA-RAM [[email protected]]