Samsung and SK Hynix are preparing one of the clearest responses yet to the pressure AI is putting on the memory market. Backed by the South Korean government, the companies plan to invest $590 billion to expand chip production as demand from AI data centers keeps rising.
The plan is not only about adding supply. It is also tied to President Lee Jae Myung's push to boost regional economic growth, with major spending directed toward new factories, packaging capacity, and next-generation chips.
What the $590 billion plan includes
The investment package is built around several large commitments. Of the total, 800 trillion won is planned for four new factories in the country's southwest. Another 81 trillion won is aimed at a packaging center, while 30 trillion won over 15 years is set aside for next-generation chips.
Those categories matter because AI demand does not only require more chips. It also puts pressure on the broader production chain, from manufacturing capacity to packaging and future chip designs. The source article does not specify timelines for each factory, but it makes clear that the broader initiative is intended to expand chip production at a time when memory supply is under strain.
The South Korean government backing also gives the plan a wider economic role. Rather than treating chip production only as a corporate expansion, the initiative is presented as part of a regional growth strategy. That makes the investment both an industrial move and an economic development push.
Why AI data centers are central to the story
The immediate driver is demand from AI data centers. AI workloads depend on high-bandwidth memory chips, and Samsung and SK Hynix together control close to 80 percent of the global market for those chips.
That position makes the two companies central to how quickly supply can respond. When the companies that control close to 80 percent of a key market expand production, the decision can shape availability for the AI systems that rely on that memory.
The source article does not describe individual AI customers or contracts. What it does establish is the link between AI data center growth, the need for high-bandwidth memory chips, and the pressure now visible in memory pricing.
Memory prices are expected to keep climbing
According to Jefferies Equity Research, via wccftech, memory prices will jump 40 to 50 percent in Q3 2026 and another 30 to 40 percent in Q4. For 2027, analysts expect a further 40 to 45 percent increase.
Those forecasts point to a market where supply relief is not immediate. The source says relief may not arrive until 2028, when 15 to 20 percent of new capacity comes online.
For buyers, that timing is important. Even if Samsung and SK Hynix commit to large-scale production expansion now, new capacity takes time to affect the market. The forecast described in the source suggests that the memory price squeeze could continue before additional supply begins to help.
Consumer electronics are already feeling the pressure
Rising memory prices are already affecting costs beyond AI infrastructure. The source notes that consumer electronics are seeing higher costs, and says Apple has hiked prices on Macs and MacBooks.
That connection is straightforward: memory is a component used across many electronic products. When memory prices rise sharply, the effect can move through the supply chain and show up in the cost of finished devices.
The article does not say how much Apple raised prices, and it does not list other companies taking similar steps. Still, the example shows that the AI memory crunch is not confined to data centers. It can reach consumers through products that depend on memory components.
What to watch next
The most important question is how quickly planned capacity can affect supply. The source points to 2028 as the moment when 15 to 20 percent of new capacity may come online, which means the next phase of the market could still be defined by high prices.
Three facts stand out:
- Samsung and SK Hynix plan $590 billion in chip production investment with South Korean government backing.
- Samsung and SK Hynix together control close to 80 percent of the global market for high-bandwidth memory chips.
- Analysts expect memory prices to rise in Q3 2026, Q4, and 2027, with relief possibly delayed until 2028.
The investment plan shows how seriously South Korea's biggest memory players are responding to AI-driven demand. But the pricing forecasts also show why the market may remain tight before new production capacity begins to change the balance.