Reports from South Korea indicate that Samsung Electronics Co., Ltd. is considering the construction of a new semiconductor packaging facility within the country.
The plant is likely to be situated in Gwangju, a region where competitor SK Hynix is also reportedly evaluating potential investments.
Informed sources suggest the South Korean tech giant is conducting a final review of the proposal, with a possible announcement coming as early as next month.
The move is underpinned by several strategic factors: Gwangju has recently established a master plan for developing a semiconductor industry cluster, back-end process company Amco has already set up operations there, and the national government plans to designate Gwangju as a hub within a "Southern Innovation Belt" to build an advanced packaging cluster.
Furthermore, the investment could benefit from institutional support under the forthcoming "Semiconductor Special Act," which is scheduled to take effect in the third quarter of this year.
Expansion of Samsung's Packaging Strategy
The focus on a "packaging" facility is significant. Packaging is the final stage of the eight core semiconductor manufacturing processes, and its importance grows with more advanced products like High Bandwidth Memory (HBM).
Analysts note that if this packaging project proceeds, it could be scaled up further, potentially evolving into a full-cycle semiconductor fabrication plant.
A political party official indicated the future possibility of "mid-sized factories handling dispersed parts of the process" being established in the area.
This consideration for a new packaging plant represents another key step by Samsung to bolster its advanced packaging capabilities.
The company's Advanced Package (AVP) division is leading the development of a "semiconductor 3.3D advanced packaging technology," targeting mass production in the second quarter of 2026 for application in AI chips.
This technology uses an RDL interposer to connect logic chips and HBM, replacing costly silicon interposers, and is expected to reduce costs by approximately 22% compared to existing solutions once commercialized.
On the capacity front, Samsung has increased its HBM production capacity by about 50% compared to 2025 levels, aiming to reach a monthly output of 250,000 wafers by the end of 2026.
Its sixth-generation HBM4 product entered mass production in February 2026 and has already secured orders for NVIDIA's next-generation AI chip "Rubin."
HBM4 is projected to account for over half of the company's HBM business revenue starting in the third quarter.
In the HBM arena, Samsung took the lead by shipping HBM4 in February 2026, with SK Hynix and Micron Technology following closely, bringing all three major memory giants into the HBM4 mass production phase simultaneously.
Samsung has chosen a different technical path for HBM4 than SK Hynix, opting not to use MR-MUF but instead accelerating hybrid bonding technology while employing 1c DRAM process technology to build a competitive edge.
If Samsung establishes an advanced packaging facility in Gwangju, it could shorten product validation cycles with customers and increase the output of saleable HBM products.
Separately, Samsung announced that its total capital expenditure for 2026 will surge to a record 110 trillion won (approximately 504.1 billion yuan), a year-on-year increase of 21.7%.
This spending will focus heavily on HBM, high-end memory, and advanced foundry services, aiming to create an integrated AI chip system encompassing "memory + foundry + packaging" to comprehensively catch up with competitors in the AI wave.
Global Market Dynamics for Advanced Packaging
The simultaneous expansion plans by Samsung and SK Hynix come during an unprecedented boom period for the global advanced packaging market.
According to a recent report from Sigmaintell, the global advanced packaging market is forecast to reach $58.7 billion in 2026, representing growth of about 97%, nearly doubling in size.
Driven by AI computing demand, lead times for advanced packaging orders commonly exceed one year, with supply shortages expected to persist until the second half of 2027.
The supply-demand gap for global advanced packaging capacity was approximately -23% in 2025, with balance not expected until the latter half of 2027, after which a more moderate growth cycle may begin.
Bolstered by strong demand from AI data centers and HBM, South Korean semiconductor firms like Samsung and SK Hynix are seeking to lock in market dominance for the next five years through capacity expansion and technological leadership.
Market analysts note that global demand for advanced packaging has evolved from "short-term scarcity" to "mid-term structural shortage."
Within this supply-demand cycle, if Samsung's new Gwangju packaging plant proceeds smoothly, it could become operational around 2027, perfectly timing the critical window just before the anticipated market inflection point.
Government Policy as a Catalyst
The regional investment plans by Samsung and SK Hynix align closely with the Lee Jae-myung administration's policies for balanced regional development.
Since February, President Lee has repeatedly emphasized the "regional balanced development" strategy in public addresses.
At a press conference marking one year in office, Lee explicitly stated that "regional priority policies will continue for balanced regional development, and further balance should be maintained in the Honam region."
In February of this year, the heads of South Korea's top ten conglomerates met with President Lee at a forum to expand regional investment, pledging a total investment of 270 trillion won over the next five years in areas outside the Seoul Capital Region.
Government policy support for regional investment encompasses multiple dimensions, including tax benefits and differentiated electricity rates, aimed at directing private capital to non-metropolitan areas and creating a nationally balanced industrial layout.
On a broader fiscal support level, the South Korean government has announced it will expand financial support for the semiconductor sector to 33 trillion won (approximately $23 billion) this year to counter external uncertainties such as potential tariff increases by the Trump administration.
Additionally, the Ministry of Science and ICT recently launched a 51.2 billion won research and development special zone support program for 2026, covering five zones including Gwangju.
This program will benefit 174 companies focused on national strategic technologies, with the semiconductor and display sectors accounting for roughly 8% of the beneficiaries.
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