SCMP affirmed that Samsung Electronics and SK Hynix are stepping up investment in semiconductor panel factories in China to increase supply in the context of the memory chip market tightening due to demand for artificial intelligence computing, thereby affirming China's continued role in semiconductor production despite global fluctuations.
According to the annual report submitted to the South Korean Financial Supervisory Agency on March 10, Samsung Electronics invested 465.4 billion won (308.8 million USD) in a chip manufacturing plant in Xi'an in 2025, an increase of 67.5% compared to the previous year.
SK Hynix also boosted spending, investing 581.1 billion won in a chip manufacturing plant in Wuxi, up 102% over the same period last year, and 440.6 billion won in a factory in Dalian, up 52% over 2024, according to the company's annual report on March 17.
Samsung's Xi'an factory, the company's only overseas memory chip factory, accounts for about 40% of NAND production (static flash memory that can store data even when not connected to electricity). Previously, the company invested 698.4 billion won in this factory in 2019, but suspended investment from 2020 to 2023, according to a report by the local news agency Seoul Economic Daily. Investment resumed in 2024 with a level of 277.8 billion won.
SK Hynix's Wuxi factory accounts for more than 30% of the company's total DRAM (random access memory) output, while Dalian factory serves as a NAND manufacturing facility. Notably, the company did not invest in any factories in 2023 before increasing spending in the past two years.
Troy Stangarone, a non-resistant researcher at the Carnegie Mellon Institute of Strategy & Technology, said these investments show the need to cope with the global AI memory shortage, as DRAM and NAND supplies are in large shortage this year.
Previously, multinational financial group Goldman Sachs raised its estimate of DRAM supply shortages in 2026 to 4.9% of total demand, up from 3.3%, and said it expects the market to experience the most severe shortage in 15 years. They also raised their forecast of NAND supply shortages to 4.2%, up from 2.5%.
According to analysts, China is an important consumption market for both Samsung and SK Hynix, due to its significant market share in the global personal computer and smartphone chip market. Therefore, they identify China as an important market in their global strategy.
Conversely, in the context of tight supply and strong demand, China is seeking to position itself as an important partner for chip manufacturers.
