SK Group unveils southwest Korea expansion at national briefing Tuesday

Surging AI chip demand strains existing production capacity

Region expected to offer large sites with stable power and water supply

Plans also include 1-gigawatt AI data center in the area

Kwak Noh-jung, CEO of SK hynix, presents the company's investment plans at the Southwest Korea Advanced Industry Development Vision National Briefing at the Kim Dae-jung Convention Center in Gwangju on Tuesday, presided over by President Lee Jae Myung. [Yonhap]
Kwak Noh-jung, CEO of SK hynix, presents the company's investment plans at the Southwest Korea Advanced Industry Development Vision National Briefing at the Kim Dae-jung Convention Center in Gwangju on Tuesday, presided over by President Lee Jae Myung. [Yonhap]

"SK Group seeks to expand southwest Korea into another production base. We will launch a new leap for South Korea's AI semiconductors from this region."

Kwak Noh-jung, CEO of SK hynix, made the remarks Tuesday at the Southwest Korea Advanced Industry Development Vision National Briefing.

SK hynix has designated southwest Korea as a candidate site for a new semiconductor cluster to meet surging AI chip demand. The company said its Yongin semiconductor cluster, currently under construction, would not be sufficient to satisfy demand from global big tech firms, making it necessary to secure an additional production base.

"On the premise that future semiconductor demand will grow explosively, the Yongin semiconductor cluster alone will not be enough to meet that demand," Kwak said. "A new semiconductor cluster has become necessary."

"We need a location where stable power and water can be supplied across a large-scale site," he added. "Southwest Korea is expected to meet the conditions required for a semiconductor cluster, and we will build a production base there to respond to global memory chip demand."

SK Group unveiled a long-term semiconductor investment strategy worth 1,100 trillion won ($714 billion) at a national briefing Monday, titled "Three Mega-Projects for South Korea's Great Leap Forward." The plan covers additional investment at Yongin and Cheongju, where fabrication plant construction is already underway, as well as the designation of southwest Korea as a new production hub.

SK Group plans to invest 400 trillion won in the southwest Korea semiconductor cluster. The decision is largely aimed at getting ahead of future demand. Building a semiconductor fab takes years — from site selection and infrastructure development to construction. The Yongin cluster alone took about nine years to establish, so the company is effectively locking in its next base well in advance.

As Kwak explained, securing a large enough site to build major fabs was the top priority in choosing southwest Korea for the new cluster. The central and local governments' active commitment to building out power and water infrastructure was also a positive factor.

SK Group also plans to expand AI data center investment in southwest Korea alongside the semiconductor production base. The group announced Monday that it would invest 1,000 trillion won through 2035 to build AI data centers across the country.

"SK Group plans to build data centers with a combined capacity of 15 gigawatts nationwide in phases," Kwak said. "In southwest Korea, we will build a 1-gigawatt AI data center to create an AI industry ecosystem where semiconductor production and AI computing generate synergies."


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