GWANGJU, South Korea—In the southwestern city known for its democracy movement and its automotive plants, Samsung Electronics is studying where to build its next advanced packaging factory, a move aimed at closing the gap with SK Hynix in the memory chips that power artificial intelligence.
Samsung is conducting a feasibility review of a semiconductor packaging plant in Gwangju, according to government and industry officials, with an investment plan expected to be announced at a meeting between President Lee Jae-myung and business leaders on June 29. The facility would handle advanced packaging for the company’s most sophisticated chips, including high-bandwidth memory, the stacked memory used in AI accelerators.
Both Samsung and SK Hynix, the two companies that dominate the memory industry, are considering their first packaging plants in the Honam region, the southwestern part of the Korean peninsula. The government of President Lee, who has made balanced regional development a signature policy, is pushing to develop the area as a hub for semiconductor back-end processes, the testing and packaging that has become as important as the chipmaking itself.
The stakes are large because packaging has become the bottleneck of the AI era. High-bandwidth memory requires stacking dozens of memory dies vertically and connecting them with through-silicon vias, a process of extraordinary precision. The company that packages fastest wins orders from Nvidia and other accelerator makers. SK Hynix, which has the largest share of the HBM market and supplies Nvidia, has built its lead as much on packaging as on memory fabrication.
Samsung has been chasing. The company’s HBM products have lagged SK Hynix’s through two generations, and its attempts to qualify with Nvidia have repeatedly slipped. Its packaging operations, concentrated in Cheonan and Onyang in South Chungcheong Province, where it converted former LCD production lines, have struggled to match the yield and capacity of its rival. A new plant in Gwangju would add capacity in a region with room to grow.
The location offers advantages beyond politics. Gwangju already hosts a semiconductor back-end ecosystem, including Amkor Technology, the contract packaging firm that is expanding its plant there with an investment of about one trillion won. The city’s Cheomdan district has a large electrical substation that can power factories immediately, and the region offers water and land that the crowded capital area lacks. Samsung is also considering an adjacent site in Jangseong County, South Jeolla Province, for future expansion.
Government support sweetens the calculus. The Special Semiconductor Act, which takes effect in August, allows the government to cover up to 100% of infrastructure construction costs for semiconductor clusters outside the capital region. The Ministry of Trade, Industry and Energy has signaled strong backing for the Gwangju project, and the city is drafting a semiconductor cluster master plan to speed development.
The two companies are approaching the region differently. Samsung’s review is well advanced, with industry sources saying the Cheomdan 3 district is the leading candidate. SK Hynix, which recently announced its own packaging expansion in Cheongju, is weighing sites in Gwangju or nearby Muan, though executives have said nothing is finalized. Both companies officially deny that any decision has been made, a standard posture until the government announcement.
The timing reflects the industry’s demand picture. AI orders have stretched packaging capacity worldwide, and Taiwan Semiconductor Manufacturing Co., the dominant contract chipmaker, has had to ration its advanced packaging lines. Samsung’s own foundry business, which competes with TSMC, has struggled to win AI customers, and executives have said packaging capability is a factor in those decisions.
For Gwangju, a Samsung plant would be transformative. The city has been trying for years to attract high-tech manufacturing, and a semiconductor facility would bring thousands of jobs and a supplier ecosystem. The government’s regional development push, combined with the semiconductor industry’s need for capacity, has aligned in a way that officials say makes the project unusually likely to proceed.
Industry veterans caution that packaging plants are not a cure for Samsung’s HBM problems. The company’s difficulties have been as much about design and yield as about capacity, and a new factory cannot fix a product that fails qualification. But the investment would signal that Samsung is serious about closing the gap, and that it will spend what it takes to do so.
The announcement, when it comes, will be read in boardrooms from Santa Clara to Taipei. Samsung is the world’s largest memory maker by revenue, and its HBM ambitions are central to the AI supply chain. Whether the Gwangju plant is the first step back to parity with SK Hynix, or another chapter in a long chase, will be decided by the products that come out of it, not the groundbreaking.
