US, Japan emerge as Korean chipmakers' production bases amid AI boom

The United States and Japan are emerging as the next key production bases for Samsung Electronics and SK hynix, as the chipmakers accelerate capacity expansion to meet surging demand for artificial intelligence (AI) semiconductors. Both countries offer advantages, with the U.S. allowing greater proximity to major customers including Nvidia and Tesla, as well as incentives that could help offset investment costs and potentially reduce exposure to semiconductor tariffs from the Donald Trump administration. Japan has a well-established ecosystem of chip equipment and materials suppliers, reliable power and water supplies in some regions and substantial government subsidies for semiconductor investments. For chipmakers, the choice of location extends beyond customer proximity, with reliable supplies of electricity and water and government incentives becoming increasingly important as companies commit billions of dollars to new fabs. “Companies look closely at incentives, including infrastructure and subsidies,” an industry official said. “They first need to assess whether water and ele