South Korean chip giants step up China investments to combat global AI memory shortage
Despite the renewed investments, the trend may be difficult to sustain as China remains under US export controls, say analysts
Samsung Electronics and SK Hynix are stepping up investments in their China wafer fabs as they race to boost supply amid a tightening memory chip market driven by demand for artificial intelligence computing, underscoring China’s continued role in semiconductor production despite US restrictions.
Samsung Electronics invested 465.4 billion won (US$308.8 million) in its Xian chip plant in 2025, a 67.5 per cent increase from a year earlier, according to an annual report filed with South Korea’s Financial Supervisory Service on March 10.
SK Hynix also ramped up spending, investing 581.1 billion won in its Wuxi chip plant, up 102 per cent year on year, and 440.6 billion won in its Dalian facility, a 52 per cent increase from 2024, according to its March 17 annual report.
“Since building new plants typically takes three to five years, optimising operations at existing production bases in China enables a much faster supply response,” said Lee Byung-chul, a visiting research fellow at the Sejong Institute and a former Samsung Electronics executive vice-president who worked at its China subsidiary for 15 years.
Samsung’s Xian facility, its only overseas memory chip fab, accounts for about 40 per cent of its NAND output. The company had previously invested 698.4 billion won in the plant in 2019, but there was a pause in spending at the facility between 2020 and 2023, local news agency Seoul Economic Daily reported. Investment resumed in 2024 at 277.8 billion won.
SK Hynix’s Wuxi plant accounts for more than 30 per cent of its total DRAM output, while the Dalian facility serves as its NAND production base. Notably, the company had made no investments in either facility in 2023 before increasing its spending over the past two years.