Countries around the world are waging a "Fab War" — a battle to expand semiconductor production facilities — because they believe that whoever holds the initiative in producing memory chips and other semiconductors could determine leadership in the artificial intelligence (AI) era and even national security.
The outcome of the investment competition ultimately depends on business viability, but Korea, the world's No. 1 and No. 2 player, faces pressure to invest in the United States, the most expensive option. U.S. President Donald Trump declared this May, "By the time I leave office, we're going to have 50% of the semiconductor manufacturing capacity." That means Korea could be mobilized to help increase U.S. manufacturing capacity, currently just over 10%, fivefold.
In Korea, pressure to invest in the U.S. is intensifying following the announcement of mega projects. SK hynix plans to invest a total of 1,100 trillion won in Yongin, Cheongju and Gwangju, while allocating $3.87 billion (about 6 trillion won) to the U.S. Samsung Electronics plans to invest 2,450 trillion won in Pyeongtaek, Yongin and Gwangju, and to inject $192.1 billion (about 290 trillion won) into its Taylor and Austin plants in the U.S.
By contrast, Micron said on the 9th that it would expand its fab expansion and technology investment in New York, Idaho and Virginia to more than $250 billion (about 375.8 trillion won) by 2035. That is a $50 billion increase in just over a year from the investment scale ($200 billion) announced last June. U.S. Commerce Secretary Howard Lutnick visited the fab construction site in the town of Clay, New York, on that day, following a January visit, throwing his weight behind Micron.
China, which faces all-out containment from the U.S., is raising large-scale ammunition in capital markets. Its largest DRAM maker, ChangXin Memory Technologies (CXMT), plans to raise 29.5 billion yuan (about 6.52 trillion won) through an initial public offering (IPO) expected next week, of which 7.5 billion yuan will be invested in expanding production capacity and upgrading technology. The remaining funds will also go toward research and development. CXMT aims to expand production capacity by 30% by the end of this year, raising it to more than 300,000 wafers per month (based on 12-inch wafers).
CXMT is also accelerating supply chain internalization to circumvent U.S. export controls. Bloomberg reported that CXMT is building a vertically integrated system that handles high-bandwidth memory (HBM) from design to manufacturing and back-end processing through three "secret subsidiaries." Yangtze Memory Technologies (YMTC), a NAND flash maker, also plans to begin mass production at a new fab in Wuhan as early as the end of this year and to build two additional fabs.
Japan, centered on Rapidus — a "semiconductor dream team" jointly funded by eight companies including Toyota and Sony — has set a goal of supplying 2-nanometer (one billionth of a meter) chips cheaper than TSMC by 2028. Backed by strong materials and components infrastructure and government support, Japan has succeeded in attracting production facilities from TSMC and Micron. Micron is investing 1.5 trillion yen (about 14.2 trillion won) in its Hiroshima plant, with Japan's Ministry of Economy, Trade and Industry providing 530 billion yen (about 5 trillion won) in support.
The expansion of AI infrastructure, a source of semiconductor demand, is proceeding despite concerns over overinvestment. Meta decided on the 9th to invest $9.17 billion (about 13 trillion won) to build its first AI data center in Canada. Meta has revised its plan to double its 7-gigawatt (GW) computing infrastructure this year to next year, dispelling concerns over reduced investment.
Samsung Electronics and SK hynix appear to see immediate investment in expanding U.S. semiconductor plants as difficult. The memory chip industry that the U.S. wants requires high-intensity shift work by employees in cleanroom suits, 24 hours a day, 365 days a year. This is far removed from the general labor culture of Americans on the ground.
In the U.S., it is difficult to find skilled semiconductor technicians, and all operating costs — including labor, construction, materials, logistics, electricity and water — are overwhelmingly more expensive than in Korea. Other factors making U.S. investment in the memory chip sector difficult include the absence of a back-end ecosystem such as packaging, relatively strong environmental and safety regulations, and the need to share some trade secrets with a foreign government.
Still, the situation is such that the U.S.'s demands, backed by tariffs, cannot simply be ignored. In May, U.S. Trade Representative (USTR) Jamieson Greer attended an event for the expansion of Micron's Virginia plant and warned, "There will not be a full-scale product tariff on semiconductors right away, but it will be imposed at an appropriate time." The U.S. has already pressured Taiwan, leading TSMC to invest a total of $165 billion in Arizona.
Samsung Electronics and SK hynix will inevitably have to consider U.S. investment if Micron, backed by zero tariffs and government subsidies, makes strides.
There is also a possibility that the U.S. could target Korea as it once destabilized Japan's semiconductor industry. In the 1980s, when Japan sharply increased its share of the global semiconductor market, the U.S. took measures such as doubling the share (quota) of American semiconductor companies within Japan through two U.S.-Japan semiconductor agreements.
