GoKawiilClose-up of logo for Samsung on research building in the Silicon Valley, Mountain View, California, October 28, 2018.
Shares of Samsung Electronics and SK Hynix declined on Monday after South Korea unveiled sweeping artificial intelligence and semiconductor mega-projects expected to attract hundreds of billions of dollars in investment over the coming years.
Samsung Electronics' stock was down 4.8%, while SK Hynix erased early losses of a near 6% decline to fall 1.6%.
President Lee Jae Myung announced plans to strengthen South Korea's semiconductor leadership and expand its artificial intelligence infrastructure through large-scale investments and new manufacturing capacity, saying the country must move faster than rivals to secure the technologies underpinning the AI era.
Samsung Electronics and SK Hynix will each build two new semiconductor fabrication plants in South Korea's southwest as part of an 800 trillion won ($518 billion) national semiconductor ecosystem project, the government said.
"We will rapidly expand our production capacity by drastically shortening the timeline from licensing to construction," said Jung-Kwan Kim, South Korea's minister of trade, industry and resources.
The announcement comes after the Maeil Business Newspaper on Friday reported that Samsung Group would announce a 1,000 trillion won ($646 billion) investment program spanning the next decade.
The report said Samsung's decade-long investment blueprint would span semiconductor fabs, AI data centers, advanced packaging, batteries and displays, including roughly 300 trillion won for new fabs in southwestern South Korea, 360 trillion won for the Yongin semiconductor cluster and more than 350 trillion won for AI data centers. The report did not clarify whether those figures overlap.
Samsung Electronics and SK Hynix have emerged as central players in the artificial intelligence boom, with demand for high-bandwidth memory chips outpacing supply as cloud providers and technology firms race to expand AI infrastructure.
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