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

The United States and Japan are positioning themselves as the next major production sites for Samsung Electronics and SK hynix, as these chipmakers ramp up capacity to handle the soaring demand for artificial intelligence (AI) semiconductors. The U.S. and Japan each bring unique advantages to the table. For the U.S., proximity to major customers like Nvidia and Tesla is a significant benefit.

Additionally, the country's incentives can help offset the high investment costs and may even reduce the impact of semiconductor tariffs from the Trump administration.

On the other hand, Japan offers a robust ecosystem of chip equipment and materials suppliers, reliable power and water supplies in certain regions, and substantial government subsidies for semiconductor investments. These factors make Japan an attractive option for chipmakers looking to establish new fabs.

Ultimately, the decision of where to build new production facilities goes beyond just proximity to customers. It also involves considering the availability of reliable electricity and water, as well as government incentives. Industry experts emphasize the importance of evaluating these aspects, starting with infrastructure and subsidies. Companies are first required to assess whether they have access to sufficient water and electricity to support their manufacturing needs before making a final decision.