Samsung to spend $228 billion on the world’s largest chip facility as part of South Korea tech plan
Samsung said it will make a 300 trillion Korean won investment in a new semiconductor facility in South Korea over the next two decades. It is part of a broader tech investment plan by the South Korean government.
SeongJoon Cho | Bloomberg | Getty Images
Samsung Electronics said Wednesday it plans to invest 300 trillion Korean won ($228 billion) in a new semiconductor complex in South Korea, which the government says will be the world’s largest, as part of an aggressive push by the country to take a lead in critical technologies.
The investment will happen over the years to 2042, a Samsung spokesperson told CNBC.
The South Korean government is looking to join together its biggest technology companies to spur development in key areas. The government said Wednesday that 550 trillion won will be invested by the private sector by 2026 in areas including chips, displays, batteries and electric vehicles.
But the big focus is on semiconductors — critical components that go into everything from smartphones to cars — and that have increasingly become a geopolitical focal point. South Korea’s expansive move is seen as a way to catch up with the U.S.’s own aggressive chip investments.
“President Yoon Suk-yeol said, while it’s important for a high-tech industry such as semiconductors to grow through a mid-to-longer term plan, we must swiftly push ahead with these plans as if it’s a matter of life and death, given the current situation of global competition,” Yoon’s spokesperson Lee Do-woon said in a briefing.
The new 300 trillion won chip complex Samsung is building will be just outside of the South Korean capital of Seoul.
South Korea’s government aims to connect chip facilities in the area from Samsung to other companies to create a “semiconductor mega cluster.” The idea is to link up various parts of the semiconductor supply chain from chip design to manufacturing.
“In selecting the new locations, we’ve taken into consideration the synergy effect that could be seen from existing semiconductor clusters,” Lee Chang-yang, South Korea’s trade, industry and energy minister, said.
The South Korean government said that companies will build five chip manufacturing facilities in the cluster.
Samsung is the world’s biggest memory chip maker. These are semiconductors that go into devices such as laptops and servers. South Korea is also home to SK Hynix, the second-biggest memory chip maker.
Semiconductor rivalries heat up
Semiconductors have become a highly politicized technology and have created a complex dynamic between allied countries, driven by the U.S.’s twofold strategy.
On the one hand, Washington has pushed to bring chip manufacturing back to U.S. shores and has got commitments from companies including Samsung and Taiwan’s TSMC, the biggest contract chipmaker, to build factories.
On the other hand, the U.S. has sought to hold back China’s semiconductor development. Last year, Washington introduced sweeping rules aimed at cutting China off from obtaining or manufacturing key chips and components and the tools required to make them.
In its tech battle with China, the U.S. has looked to strike alliances with South Korea, Japan, Taiwan and the Netherlands to help cut China off from key technology.
But at the same time, the U.S. signed the Chips and Science Act which includes $52 billion in support for companies producing chips in a bid to attract investment into America and boost the country’s standing in the semiconductor industry.
That has created a competitive landscape between allied nations even as they seek partnerships.
“As of now, every country is trying to build its own competitive strengths. There is a flood of tax breaks and capital commitments from governments seeking to onshore semiconductor production,” Pranay Kotasthane, chairperson of the high tech geopolitics program at the Takshashila Institution, told CNBC.
“The impulse for competition is stronger than the impulse for cooperation. Incentives might change if the planned incentives don’t work or when the semiconductor industry sees a downward trend in the investment cycle.“
Samsung manufacturing push
For Samsung, the government’s support could help it catch up with TSMC — the biggest contract chipmaker. TSMC manufactures some of the most advanced semiconductors in the world for companies such as Apple.
Samsung, known for consumer electronics and memory chips, is looking to ramp up its contract chipmaking, or foundry business.
In October, the company laid out an ambitious roadmap to manufacture the most advanced chips in the world by 2027.
Samsung shares closed 1.3% higher in South Korea on Wednesday after the announcement of its chip investment plans.
Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
David Paul Morris | Bloomberg | Getty Images
Meta’s AI assistant now has 1 billion monthly active users across the company’s family of apps, CEO Mark Zuckerberg said Wednesday at the company’s annual shareholder meeting.
The “focus for this year is deepening the experience and making Meta AI the leading personal AI with an emphasis on personalization, voice conversations and entertainment,” Zuckerberg said.
The artificial intelligent assistant’s 1 billion milestone comes after the company in April released a standalone app for the tool.
The plan is for Meta to keep growing the product before building a business around it, Zuckerberg said on Wednesday. As Meta AI improves overtime, Zuckerberg said “there will be opportunities to either insert paid recommendations” or offer “a subscription service so that people can pay to use more compute.”
In February, CNBC reported that Meta was planning to debut a standalone Meta AI app during the second quarter and test a paid-subscription service akin to rival chat apps like OpenAI’s ChatGPT.
“It may seem kind of funny that a billion monthly actives doesn’t seem like it’s at scale for us, but that’s where we’re at,” Zuckerberg told shareholders.
During the Meta shareholder meeting, investors voted on 14 different items related to the company’s business, nine of which were shareholder proposals covering topics such as child safety, greenhouse gas emissions and a proposed bitcoin treasury assessment.
Shareholder proposal 8, for example, was submitted by JLens, which is an investment advisor and affiliate of the Anti-Defamation League, and called for Meta to prepare an annual report detailing and addressing hate content, including antisemitism, on its services following January policy changes that relaxed content-moderation guidelines.
Early voting results on Wednesday showed the proposals that Meta’s board did not recommend were unlikely to pass, including one calling for the company to end its dual-class share structure, which gives Zuckerberg significant voting power. Meanwhile, the voting items that the board favored, including those pertaining to approving the company’s board of director nominees and an equity incentive plan, were likely to pass, based on the preliminary results.
Meta said final polling results will be released within four business days on the company’s website and the U.S. Securities and Exchange Commission.
Salesforce CEO Marc Benioff participates in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 22, 2025.
Chris Ratcliffe | Bloomberg | Getty Images
Salesforce shares were volatile in extended trading on Wednesday after the sales and customer service software maker reported upbeat fiscal first-quarter results and guidance.
Here’s how the company performed relative to LSEG consensus:
- Earnings per share: $2.58 adjusted vs. 2.54 expected
- Revenue: $9.83 billion vs. $9.75 billion expected
Salesforce’s revenue grew 7.6% year over year in the quarter, which ended on April 30, according to a statement. Net income of $1.54 billion, or $1.59 per share, was basically flat compared with $1.53 billion, or $1.56 per share, a year ago.
President Donald Trump announced sweeping tariffs on goods imported into the U.S. in early April. Co-founder and CEO Marc Benioff sounded positive about the company’s results for the quarter anyway, pointing to its plan, announced on Tuesday, to buy data management company Informatica for $8 billion.
It would be Salesforce’s priciest acquisition since the $27.1 billion Slack deal in 2021. Slack marked the top end of the buyouts Salesforce had made under Benioff. Activist investors raised concerns about all the spending, in addition to slowing revenue growth.
Salesforce sprung into action, slashing 10% of its headcount. Benioff proclaimed that the board’s mergers and acquisitions committee had been disbanded. The company’s finance chief at the time said it would reach a margin expansion goal two years early. And Salesforce started paying dividends to shareholders.
Initial reception to the Informatica announcement was generally favorable. “Salesforce is paying a reasonable multiple for the asset, in our view, and the deal should be more easily digested by investors than some of the company’s large deals in the past (i.e. Slack),” Stifel analysts led by J. Parker Lane wrote in a note to clients. The investment bank has a buy rating on Salesforce shares.
During the fiscal first quarter, Salesforce introduced the AgentExchange marketplace for artificial intelligence agents.
Management sees $2.76 to $2.78 in adjusted earnings per share on $10.11 billion to $10.16 billion in revenue for the fiscal second quarter. Analysts polled by LSEG had expected $2.73 in adjusted earnings per share on $10.01 billion in revenue.
Salesforce bumped up its full-year forecast. It called for $11.27 to $11.33 in adjusted earnings per share and $41.0 billion to $41.3 billion in revenue, implying revenue growth between 8% and 9%. The LSEG consensus included net income of $11.16 per share and $40.82 billion in revenue. The guidance in February was $11.09 to $11.17 in adjusted earnings per share, with $40.5 billion to $40.9 billion in revenue.
As of Wednesday’s close, the stock had slipped about 18% so far in 2025, while the S&P index was unchanged.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
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