SK Group, a multinational manufacturing and services firm, has announced that it will invest a total of KRW 2,100 trillion (US$ 1.36 trillion) into expanding its South Korean operations. That investment will be split across two of SK Group’s operations, SK Hynix and SK Telecom, to build out semiconductor and AI data center capacity respectively.
“We should not simply export AI products. We need to export intelligence itself while building a domestic market for AI-driven intelligence,” Chey Tae-won, Chairman, SK Group, said, as reported by Yonhap News Agency. “To achieve that, we will rapidly build AI factories in the form of large-scale AI data centers.”
Breaking down its proposed investment, SK Hynix said that it will invest KRW 600 trillion (US$ 388.8 billion) in Yongin, KRW 100 trillion (US$ 64.8 billion) in Cheongju, and KRW 400 trillion (US$ 259.2 billion) in the southwestern region. The company said that it would accelerate construction of the fourth fab at the Yongin Semiconductor Cluster. Originally, that project was scheduled to be completed in 2045 but is now targeted for completion by 2033.
In addition, to increase production capacity, new NAND fabs are planned for SK Hynix’s operations in Cheongju.
Even with these expansions however, SK Hynix acknowledged that another manufacturing hub is required to meet future demand and avoid a repeat of the current disruption to the market. The southwestern region of South Korea has been identified as a prime location for a new semiconductor cluster, and as such the firm will invest in the region in phases to cover land acquisition, fab construction, and the installation of manufacturing equipment. SK Group diversify its geographic locations is a wise move considering real estate in cities like Seoul comes at a premium
The remainder of the investment from the wider SK Group – KRW 1,000 trillion – will be used by SK Telecom to build data centers across South Korea with a combined capacity of 15 GW. The firm plans to add 5 GW of that capacity by 2029 with a further 10 GW added thereafter.
SK Group’s announcements arrive on the back of South Korean President Lee Jae-myung announcing three megaprojects on Monday. These projects aim to strengthen the country’s competitiveness in advanced technologies. Among these projects is a national network of AI data centers with an 8.4 GW facility set to be built by 2029 through a partnership between the government and the private sector.
To achieve these goals, SK Group, GS Group, and Naver will invest about KRW 550 trillion (US$ 354.6 billion) in the first phase, with total AI data center investment expected to exceed KRW 1,000 trillion (US$ 644.9 billion) by 2035. The government will support the buildout through power, water, and permitting measures
The South Korean government will also establish an AI Data Center Cluster where semiconductor, server, power, cooling, and networking companies can verify their technologies and contribute to foreign projects, creating a thriving export industry.
Even before this week’s announcements, Mordor Intelligence forecast the South Korean data center market to grow at a 20.38 percent CAGR between 2026 and 2031. So long as the government’s pledge to clear the constraints that usually decide where capacity actually gets built the trillion-won headline figures start to look buildable rather than aspirational.