How Should South Korea’s Chip Sector Respond to the US Push for Memory Fabs?

The United States is pressing for more memory-chip manufacturing on its own soil because it lacks enough domestic capacity for a component that has become a bottleneck in artificial-intelligence development.

Only one memory facility currently operates in the United States, Micron Technology’s fab in Manassas, Virginia. The company says about 2% of the world’s memory chips are manufactured there. Micron is expanding the site and plans large-scale memory fabs in Boise, Idaho, and Clay, New York.

Samsung Electronics and SK Hynix, the two leading companies in the memory semiconductor market, are investing in the United States, but their current projects focus on foundries and advanced packaging. Samsung’s foundry in Taylor, Texas, is expected to begin production at its first plant within the year. SK Hynix has begun construction of a packaging fab in West Lafayette, Indiana, following an August groundbreaking ceremony.

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Of total memory chips in the world, about 2% are manufactured in the US, all at our Manassas, Virginia facility.

The United States is also watching China’s growing memory industry. CXMT and YMTC have emerged as the country’s two main players, while supply shortages have pushed major American companies such as Apple to use Chinese-made memory chips. Expected growth in artificial-intelligence demand is adding urgency to Washington’s effort to localize production.

South Korean semiconductor companies are monitoring the Trump administration’s policy closely. Some have already announced plans for large memory fabs in Yongin and the southwestern Honam region, but they cannot ignore the demands of one of the world’s biggest memory-chip buyers. Lee Jong-hwan of Sangmyung University said companies must weigh US labor costs, competitiveness, available investment capacity and the risk of technology leakage. Experts argue that Seoul should accelerate support for domestic hubs while explaining those constraints to Washington.

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There are a considerable number of factors to consider when investing in the US: labor costs, cost competitiveness, how much companies can afford to invest, and concerns related to the leaking of technology.