South Korea wants its next wave of AI chip wealth to land somewhere other than greater Seoul. The chosen spot is a former military air base in the southwest.
On June 29, 2026, the government unveiled a public-private investment of 800 trillion won, or approximately $520 billion, for a new semiconductor hub in the Gwangju and Jeonnam region. Samsung Electronics and SK hynix are set to anchor it.
The plan carries a domestic upside and a diplomatic catch. According to Bloomberg, the hub could help spread AI-driven prosperity into the southwest. It could also become another source of friction between Seoul and Washington.
Four fabs on an old runway
The project centers on the site of the former Gwangju Air Base. That land falls within what is now called the Jeonnam-Gwangju Integrated Special City.
Samsung and SK hynix are each expected to build two memory chip fabrication plants there, for four in total.
The schedule runs in stages:
- 2027: site preparation expected to be finished
- 2028: construction could potentially begin
- June 2030: target for first mass production
The initial build-out is planned at about two-thirds the scale of SK hynix’s Yongin complex. Officials have left room for the cluster to grow beyond that first phase.
Why the southwest, and why now
President Lee Jae-myung made the case for the region by pointing to four inputs. He cited water, renewable energy, land and labor as strategic advantages for chip production.
The Seoul metropolitan area has been running short on several of those. Land and resource limits around the capital have become a capacity problem. The Gwangju hub is partly a pressure-release valve.
The project already has visible corporate backing. On October 9, 2026, SK Group Chairman Chey Tae-won visited the site and stressed the need to speed up construction.
What this means for chipmakers, the region and Washington
For Samsung and SK hynix, the hub is a bet that AI memory demand stays strong into the next decade. With first production targeted for June 2030, the plants are aimed at demand several years out, not this quarter’s order book.
The scale of the commitment is the headline number to remember. An 800 trillion won public-private package signals that Seoul views AI memory as a national industrial priority, not just a corporate one.
Infrastructure readiness and talent development remain open questions before the cluster can run at full scale.
Watch the 2027 site preparation milestone as the first real test. If that slips, the 2028 construction start and the June 2030 production target come under pressure. The word “potentially” attached to the 2028 date is doing some work.
The Washington dimension is the wild card. Bloomberg flagged the hub as a potential new point of tension in the US-South Korea relationship.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.