Korean Chipmakers Waver Under Chinese Offensive... Samsung and SK hynix Bet on Facility Investment and Responsible Management

Samsung Invests 16 Trillion Won in R&D in Q2
SK hynix Allocates 40 Trillion Won for Facility Investment This Year
President TM Roh and Chairman Chey Tae-won Purchase Company Shares

Samsung Electronics and SK hynix are significantly expanding their research and development (R&D) and capital expenditures to counter China's advances in the semiconductor sector. Their strategy focuses on proactively investing in cutting-edge processes and production capacity to maintain a technological gap, while also aiming to calm market anxieties by having top management purchase company shares.

According to the semiconductor industry on August 3, Samsung Electronics spent 16 trillion won on R&D in the second quarter of this year. This is the largest quarterly amount ever for the company. These investments are aimed at strengthening its future technological competitiveness, particularly for artificial intelligence (AI) memory and advanced foundry processes. Samsung Electronics projects that revenue from HBM4 (6th-generation high-bandwidth memory) in the third quarter of this year will be more than triple that of the previous quarter. In the second half, the company plans to boost production capacity and yield for 10nm-class 6th-generation (1c) DRAM to expand HBM supply. For the foundry business, Samsung will begin mass production of new mobile products using next-generation 2nm processes in the second half and aims to win additional orders for cutting-edge processes in AI and high-performance computing (HPC) sectors.

SK hynix expects its capital expenditure to reach the upper 40 trillion won range this year, an increase of more than 10 trillion won from last year's 30.173 trillion won. The company plans to secure production infrastructure in advance based on mid- and long-term demand forecasts agreed upon with customers. As demand for AI memory exceeds supply capabilities, the company believes it is now vital not only to maintain technological competitiveness, but also to ensure the ability to deliver the volumes required by customers in a timely manner.

In line with this, SK hynix is moving up the mass production schedule for its Cheongju M15X fab. The company is also making proactive investments so that it can expand its production capacity once the clean room at the first phase of the Yongin Semiconductor Cluster opens in early 2027. Other long-term projects, such as the advanced packaging plant P&T7 and the NAND production site M17, will be executed in phases, taking customer demand and investment efficiency into account.

Recently, amid concerns over China's aggressive push in semiconductors and overheated AI market sentiment, the stock prices of Korean chip companies have declined, prompting corporate executives to directly demonstrate responsible management. According to the Financial Supervisory Service's electronic disclosure system, on July 30, TM Roh, President of Samsung Electronics, purchased 3,045 shares at 230,000 won per share, totaling 735 million won.

SK Group Chairman Chey Tae-won also bought 3,620 shares of SK hynix common stock on the same day through the market. This is the maximum amount that can be purchased without a prior disclosure procedure required for transactions exceeding 5 billion won under current regulations. The action is interpreted as an effort to restore trust in the stock market and signal strong confidence in management. Chairman Chey had also emphasized at the Jeju Summer Forum held by the Korea Chamber of Commerce and Industry on July 17 that investments in SK hynix would continue to grow over time because memory will always be necessary, leading to long-term upward momentum.

This all-out response by Korean semiconductor companies is set against the backdrop of aggressive investment expansion by Chinese firms. On July 27, Changxin Memory Technologies (CXMT), which was listed on the STAR Market—a Chinese equivalent of the NASDAQ and a dedicated technology market at the Shanghai Stock Exchange—became the most valuable company in the Chinese mainland market on its first trading day. CXMT raised up to 66.61 billion yuan (about 14.4 trillion won), pledging to use these funds for next-generation memory R&D, including expanding its production line and developing DRAM technology, to narrow the technology gap with industry leaders. In the second half, Yangtze Memory Technologies (YMTC), DeepSeeq, and Moonshot are also planning IPOs and preparing to ramp up their investments.

Industry experts note that while Korean companies maintain an edge in advanced process technology and high-bandwidth memory (HBM), Chinese companies could become formidable competitors if they continue to expand production capacity with large-scale funding, potentially leading to an onslaught of volume and accelerated technology catch-up. According to research firm Counterpoint Research, by revenue, the global DRAM market share in the first quarter of this year was led by Samsung Electronics (38%), followed by SK hynix (29%) and Micron (22%). CXMT’s market share has also quickly risen from 3% in the first quarter of last year to 8% now.

This content was produced with the assistance of AI translation services.