Samsung and SK Hynix earmarked KRW622 trillion won ($471.1 billion) to beef up chip production capacity in the southern province of Gyeonggi, aiming to build 16 new fabrication facilities by 2047, Yonhap News Agency reported.

The news agency said the 21 million square metre mega cluster will include an exclusive fabless zone as well as additional foundry and memory chip production facilities, citing a statement from ministries for science and industry.

There are currently 21 fabrication facilities in the area.

South Korea’s government also unveiled plans to build a zone for manufacturing materials, parts and equipment, along with R&D facilities. The Ministry of Trade, Industry and Energy estimated the project will create 3.5 million jobs.

Samsung is allocating a total of KRW500 trillion to the project, with KRW360 trillion to be spent on six fabrication sites in Yongin, KRW120 trillion on three in Pyeongtaek and KRW20 trillion on three research units in Giheung, Yonhap News Agency wrote.

SK Hynix will invest KRW122 trillion in four fabrication sites in Yongin.

Data from the national statistical office showed shipments of chips by South Korean companies was up 80 per cent year-on-year in November, signalling a recovery in the sector.

But Samsung last week estimated operating profit in Q4 2023 dropped 35 per cent to KRW2.8 trillion.