Samsung is reportedly planning to build a new advanced chip packaging plant to cope with the explosive demand for AI computing power.

According to reports from Korean media, Samsung is considering building a chip packaging plant in South Korea. The facility may be located in Gwangju, and it is worth noting that SK Hynix is also considering investing in the area. According to insiders, the South Korean tech giant is in the final stages of reviewing this plan, and an announcement may be made as early as next month. The construction of this facility has multiple strategic backgrounds: the Gwangju region has recently formulated an overall plan for the development of the semiconductor industry cluster, and the semiconductor back-end enterprise Amco has also established itself in the area. The South Korean government is planning to establish Gwangju as a hub of the "Southern Circle Innovation Belt" to build an advanced packaging cluster. In addition, the investment may also receive institutional support from the "Semiconductor Special Law," which is set to be implemented officially in the third quarter of this year. Samsung's packaging strategy deepens: 3.3D technology mass production imminent, HBM capacity significantly increased. In terms of investment direction, the "packaging" facility is mentioned first. Packaging, as the final stage of the eight core processes of semiconductor manufacturing, becomes more important for advanced semiconductors such as high-bandwidth memory (HBM). Some analysts point out that if the packaging project is successful, it may further expand in scale and even form a full-cycle semiconductor fab. Officials from the ruling party revealed that in the future, there may also be the possibility of "medium-sized factories dispersing some processes" entering the region. The consideration of constructing a new packaging plant is another key move by Samsung Electronics to strengthen its advanced packaging capabilities. Samsung Electronics is leading the development of "Semiconductor 3.3D Advanced Packaging Technology" in the Advanced Packaging (AVP) department, with the goal of mass production in the second quarter of 2026, primarily for use in AI semiconductor chips. This technology connects logic chips and HBM by installing RDL interposer layers to replace expensive silicon interposer layers, and commercialization is expected to save about 22% of costs compared to existing solutions. In terms of capacity, Samsung has increased its HBM capacity by about 50% compared to 2025, with the goal of reaching a monthly production level of 250,000 wafers before the end of 2026. Its sixth-generation HBM4 product was mass-produced in February 2026 and has received orders for Nvidia's next-generation AI chip "Rubin". It is expected that starting from the third quarter, HBM4 will contribute to more than half of the company's HBM business revenue. In the HBM field, Samsung shipped the HBM4 product in February 2026, followed by SK Hynix and Micron, the three major memory giants have entered the HBM4 mass production stage simultaneously. In the technical roadmap for HBM4, Samsung has chosen a different strategy from SK Hynix, not adopting MR-MUF but accelerating the mixed bonding technology, as well as using 1c DRAM process technology to gain a competitive advantage. If Samsung establishes an advanced packaging facility in Gwangju, it may shorten the product verification cycle and increase the number of HBM products that can be sold. On the same day, Samsung Electronics also announced that its capital expenditure for the full year 2026 would soar to 110 trillion Korean won (about 504.1 billion yuan), an increase of 21.7% year-on-year, reaching a historical high. The focus is on HBM, high-end storage, and advanced foundry, aiming to create an integrated AI chip system of "storage + foundry + packaging" to catch up with competitors in the AI wave. Global Advanced Packaging Market: Nearly $60 Billion in 2026, Supply-Demand Gap Continues until 2027 The simultaneous expansion of production by Samsung and SK Hynix is occurring during an unprecedented boom period in the global advanced packaging market. According to the latest report from Allied Market Research, the global advanced packaging market is expected to reach $587 billion in 2026, an increase of about 97% year-on-year, almost doubling. Driven by the demand for AI computing power, advanced packaging orders are generally scheduled for over a year, and the supply shortage is expected to continue until the second half of 2027. The supply-demand ratio of global advanced packaging production capacity was about -23% in 2025, and it is expected to reach a balance in the second half of 2027, entering a relatively mild growth period. Under the strong influence of AI data centers and HBM demand, South Korean semiconductor companies represented by Samsung and SK Hynix are trying to lock in market dominance in the next five years through capacity expansion and technological leadership. Market analysts point out that global demand for advanced packaging has evolved from "short-term scarcity" to "mid-term structural scarcity." In such a supply-demand cycle, if Samsung's new packaging facility in Gwangju is successfully established, it may have the opportunity to form effective capacity around 2027, just in time for the critical window before the market supply-demand turning point. Government Initiatives: Combination of Tax Incentives, Electricity Price Differences, and Regional Balanced Policy Samsung and SK Hynix's local investment plans are highly aligned with President Lee Jae-myung's regional balanced policy. Since February, President Lee Jae-myung has repeatedly emphasized the strategy of "regional balanced development" in public appearances. At his one-year anniversary press conference, Lee Jae-myung specifically stated: "For regional balanced development, the policy of prioritizing regions will continue in the future, and balance should be further maintained in Hunan." In February of this year, the top ten chaebols in Korea held a forum with President Lee Jae-myung to expand local investment, pledging a total investment of 270 trillion Korean won in areas outside the Seoul metropolitan region over the next five years. The government's policy support for local investment covers multiple dimensions, including tax incentives and differential application of electricity prices, aimed at directing social capital flow to areas outside the capital region to achieve a national-level balanced industrial layout. At a more comprehensive level of financial support, the South Korean government announced this year that the scale of financial support for the semiconductor industry would be expanded to 33 trillion Korean won (approximately $23 billion) to deal with uncertainties such as the Trump administration's imposition of tariffs. In addition, the Ministry of Science and ICT of South Korea recently launched a 5.12 billion Korean won research and development special zone support plan for 2026, covering five special zones including Gwangju, benefiting 174 companies focusing on national strategic technologies, with the semiconductor and display sectors accounting for about 8%.