Samsung plans $310bn investment to power AI expansion

SEOUL: South Korean conglomerate Samsung unveiled on Sunday a plan to invest $310 billion over the next five years mostly in technology powering artificial intelligence, aiming to meet growing demand driven by a global boom.

The business group’s flagship Samsung Electronics is already one of the world’s top memory-chip makers, providing crucial components for the AI industry and the infrastructure it relies on.

South Korea is also home to SK hynix, another key player in the global semiconductor market.

The five-year investment package includes plans to build a new semiconductor facility, Pyeongtaek Plant 5, designed “to meet the needs of memory-chip demands”, Samsung said in a statement.

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Once in full operation, “the Pyeongtaek plant is expected to play an even greater strategic role in both the global semiconductor supply chain and South Korea’s domestic chip ecosystem,” it said.

The new line is scheduled to begin operations in 2028.

Samsung SDS, the group’s IT and logistics arm, will establish two AI data centres in South Jeolla and Gumi, the company said, without providing further details.

Samsung Group is a network of affiliated companies with complex cross-shareholdings under the Samsung brand, rather than a single legal holding company.

It is South Korea’s largest chaebol, the family-run conglomerates that dominate the country’s economy.

The $310-billion plan also includes some projects unrelated to AI.

Under the investment package, the company said that Samsung SDI, its electric-vehicle battery affiliate, was exploring the creation of a domestic production line “for next-generation batteries, including all-solid-state batteries”.

The AI boom has delivered a major tailwind for Samsung Electronics and SK hynix, whose high-performance memory chips have become indispensable for AI computing.

Samsung Electronics has reported that its profit increased more than 30 percent year-on-year in the third quarter, driven by AI-fuelled demand.

AI-related spending is soaring worldwide and sky-high tech share valuations have fed concerns of an AI market bubble that could eventually burst, like the dot-com boom that imploded at the turn of the millennium.

The investment package announced on Sunday comes after the South Korean government had pledged to triple spending on artificial intelligence next year.

President Lee Jae Myung has vowed to “usher in the AI era” and make the country one of the world’s top three AI powers, behind the United States and China.