Strategic investments by Korean tech companies are reshaping the industrial landscape

Background of Investment Strategies

Faced with intensifying global competition and the advent of the AI revolution, South Korea’s leading tech companies are fully committed to strengthening the domestic industrial base. The investment plans announced by Samsung Electronics and Hyundai Motor Group are expected to reach a total of approximately $400 billion, indicating a strategic alignment beyond mere business decisions and suggesting a national strategic partnership.

In response to the pressure of global capital outflows, these companies’ decision to concentrate investments domestically aims to maintain long-term competitiveness in South Korea’s technology industry.

Samsung’s Next-Generation Chip Strategy

Samsung Electronics’ plan is particularly clear. They will establish new production lines at the Pyeongtaek semiconductor facility, investing a total of 450 trillion won (about $3,110 billion) over five years. Construction of the P5 facility will resume from October 2025, with plans to expand production capacity by the second half of 2027.

The focus of this investment is on AI chips and next-generation memory technologies. Priority is given to the development of high-bandwidth memory (HBM4), utilizing the 10-nanometer generation dynamic random-access memory (DRAM) process. Industry analysts point out that this strategic choice signals a significant shift in Samsung’s management approach, emphasizing the concentration of management resources on high-value-added products rather than expanding production of conventional chips. It is also suggested that supply shortages of traditional chips may continue until 2026.

Hyundai Motor’s Manufacturing Base Enhancement

Hyundai Motor Group is not lagging behind. They have announced an investment of 125.2 trillion won (about $860 billion) domestically over five years from 2026 to 2030.

This allocation will be used for expanding production capacity, accelerating research and development, and upgrading manufacturing lines across the country. As the automotive industry transitions to electric vehicles and autonomous driving technologies, Hyundai’s decision to prioritize domestic investment aims to control supply chains and accelerate technological innovation.

Infrastructure Load and New Demands

These large-scale investments are expected to place significant strain on South Korea’s regional infrastructure, especially in terms of power and water supply capacity.

If Samsung’s Pyeongtaek expansion and Hyundai’s domestic projects become operational, there will be substantial demand on energy systems and water networks around both facilities. To address this, industrial energy companies will find new business opportunities. The Korea Water Resources Corporation has already begun assessing water supply and transportation for the Yongin semiconductor industrial complex project in southern Seoul.

Energy technology experts suggest that implementing cogeneration power generation and energy storage systems (ESS) can efficiently manage electricity demand. Additionally, companies like SK Hynix are considering relaxing building standards and advancing facility designs that accommodate energy-intensive manufacturing processes.

Strategic Significance in Global Competition

The investment announcements by Samsung and Hyundai symbolize South Korea’s relentless effort to maintain its position as a global tech powerhouse.

With nearly $400 billion invested domestically, these companies aim to sustain innovation cycles in AI, advanced memory, and automotive technologies, while executing strategies to prevent production gaps caused by international capital outflows. Industry insiders believe these projects will create thousands of jobs and accelerate growth in related sectors such as supply chain strengthening and industrial energy management.

In the long term, this concentrated domestic investment is likely to serve as a strategic means for South Korea to secure a competitive advantage in its critical technology industries amid escalating global competition.