Amid unprecedented demand for artificial intelligence hardware, memory and processor manufacturers are reaping windfall profits. It is precisely these colossal earnings that have allowed South Korean tech giants to agree to massive funding for a government initiative aimed at securing the country's key position in the AI industry faster than its competitors.

President Lee Jae-myung announced plans to invest about 900 trillion won (over $583 billion) in building new semiconductor manufacturing facilities. The sites will be located in the southwestern part of the country. According to Industry Minister Kim Jong-kwan, the lion's share of the funding – 800 trillion won – will be shouldered by Samsung and SK hynix.

These two giants control about two‑thirds of the global DRAM market and, together with America's Micron, remain the only producers of high‑bandwidth memory (HBM) required for Nvidia's AI accelerators. The $583 billion figure looks astronomical, especially considering it accounts for roughly one‑third of South Korea's entire GDP, which was estimated at $1.8 trillion in 2025. The exact timeline for the investments has not yet been specified.

Implementing this mega‑project will require not only enormous financial outlays but also solving complex infrastructure challenges: acquiring land, securing energy and water supplies for the facilities, and attracting a vast number of skilled workers.

However, behind the euphoria lie serious risks. The key question is what would happen if demand for AI hardware suddenly collapsed. The boom has been highly lucrative for hardware manufacturers, but companies integrating AI into their services have yet to see the expected returns. Currently, token processing is relatively cheap, but if costs do not come down, developers like OpenAI and Anthropic will have to raise prices significantly. And if using AI becomes more expensive than human labour, mass adoption will lose its purpose.