South Korean Semiconductor Firms Increase Chinese Factory Investments Amid AI Memory Demand

South Korean semiconductor manufacturers Samsung Electronics and SK Hynix have significantly increased their investments in Chinese production facilities to address growing demand for memory chips driven by artificial intelligence computing. According to annual reports filed in March, Samsung invested 465.4 billion won (approximately $308.8 million) in its Xian chip plant in 2025, representing a 67.5% increase from the previous year. SK Hynix boosted spending at its Wuxi facility by 102% to 581.1 billion won and increased investment in its Dalian plant by 52% to 440.6 billion won. These investments come despite ongoing U.S. export controls affecting China's semiconductor industry. Analysts note that optimizing existing Chinese production bases allows for faster supply responses compared to building new facilities, which typically requires three to five years. Samsung's Xian plant, its sole overseas memory chip fabrication facility, produces about 40% of the company's NAND output, while SK Hynix's Wuxi location accounts for over 30% of its DRAM production. Both companies had paused or reduced investments in these Chinese facilities between 2020 and 2023 before resuming spending in recent years. The increased investments highlight China's continued importance in global semiconductor manufacturing despite geopolitical tensions and trade restrictions.