Samsung, SK Hynix step up China investments to combat global AI memory shortage

Surge in spending to plug an AI-driven gap

South Korea’s memory champions are boosting capacity in China as demand for AI computing tightens the global memory market. It has been reported that Samsung Electronics invested 465.4 billion won (US$308.8m) in its Xi’an wafer fab in 2025, a 67.5% rise from a year earlier. SK Hynix reportedly also ramped up spending, putting 581.1 billion won into its Wuxi DRAM plant (up 102% year‑on‑year) and 440.6 billion won into its Dalian NAND site (up 52%).

Faster output from existing sites

Why China? Building new fabs typically takes three to five years. Optimising existing production bases delivers a much faster supply response, said Lee Byung‑chul, a visiting research fellow at the Sejong Institute and a former Samsung executive. Samsung’s Xi’an facility — its only overseas memory fab — accounts for roughly 40% of its NAND output, while SK Hynix’s Wuxi and Dalian plants supply more than 30% of its DRAM and serve as its NAND base respectively. Both companies had cut or paused China spending in the early 2020s and have resumed investment in the past two years.

Geopolitics and sustainability concerns

Analysts warn the push may be hard to sustain. China remains subject to US export controls on advanced chip technology and equipment, and those restrictions shape what overseas fabs can produce and how far foreign firms can upgrade local capacity. Reportedly, the current spending is as much about short‑term throughput and yield improvements as it is about long‑term node advances. How long can companies thread the needle between market demand and geopolitical limits? The answer will help determine whether the memory crunch eases or simply shifts the bottleneck elsewhere.