New Delhi, June 30 -- South Korean tech giants Samsung Electronics and SK Hynix said Monday they will invest a combined 800 trillion won ($518 billion) in building a new computer chipmaking hub in the country's southwest region, capitalizing on surging artificial intelligence -driven demand.

President Lee Jae Myung joined the companies' chairs Monday in announcing the plan, which dovetails with the government's efforts to expand investment beyond the greater Seoul metropolitan area, the country's economic center and heart of its semiconductor sector.

The southwest has been a particular focus, as it lacks major industrial hubs and has historically trailed in economic development. The region has long been a political base for Lee's libera...