A visit to Samsung’s massive new semiconductor hub
Generative AI models run on powerful chips known as GPUs, which depend on stacks of specialized memory chips packaged with the processor. To meet growing demand for memory, Samsung is building a massive new semiconductor manufacturing complex in Pyeongtaek, South Korea.
Samsung has built a massive new semiconductor manufacturing complex in Pyeongtaek, South Korea, to meet rising global demand for memory chips. The complex spans an area roughly the size of New York City’s Central Park and currently includes three fully operational fabrication plants (fabs), with a fourth nearing completion. A fifth fab’s construction was paused in 2024 due to a temporary decline in memory chip demand but has since resumed because of the surge in demand driven by the artificial intelligence (AI) boom. These fabs produce specialized memory chips essential for powering advanced AI systems, particularly GPUs (Graphics Processing Units), which are critical components in AI accelerators like those made by Nvidia. The facility’s design includes striking Mondrian-style panels in red, yellow, and blue, blending industrial functionality with visual appeal.
The Pyeongtaek complex employs thousands of workers, including construction crews and safety officers like Choi Hye-rin, a 35-year-old safety officer overseeing cable duct construction. Workers wear full black uniforms with sky-blue vests and helmets, many commuting from nearby Songtan via shuttle buses. They earn 140,000 South Korean won (approximately $97) per day and often inquire about short-term housing leases, as the demand for labor has driven real estate activity in the area. The work environment is physically demanding, with high temperatures and crowded zones, but the urgency of the project keeps workers engaged. Safety is a top priority, with banners, LED scoreboards, and pledges emphasizing caution. The facility also features amenities like buffets and diners, reflecting its self-contained, campus-like structure.
The AI boom has significantly increased the need for high-bandwidth memory chips, which are vital for training and running generative AI models. Samsung’s Pyeongtaek complex is part of the company’s strategy to reclaim its lead in the global memory chip market, where it faces competition from domestic rival SK Hynix and Taiwanese manufacturer TSMC, which dominates the foundry business (manufacturing chips designed by other companies). Samsung predicts that memory chip demand will continue growing through 2028, justifying the expansion of its facilities. The company halted construction of a fifth fab in 2024 due to a temporary market downturn but restarted it as demand rebounded, highlighting the cyclical nature of the semiconductor industry.
The Pyeongtaek complex has become a significant economic driver for the region, attracting workers from across South Korea and creating opportunities for local businesses, including real estate offices and restaurants. The high wages and steady employment have made chip manufacturing jobs highly sought after, even in a competitive labor market. For example, Choi Hye-rin, a safety officer, has no plans to leave, citing the higher pay and relative ease of the work compared to other construction sites. The complex’s growth has also spurred demand for affordable housing, with workers exploring short-term rental options. This economic ripple effect underscores the broader impact of semiconductor manufacturing on local communities and labor markets.
