SK Hynix to invest US$15 billion in semiconductor expansion

FACTORY EXPANSION SK Hynix to invest US$15 billion in semiconductor expansion

2024-05-28 From Luke James 2 min Reading Time

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SK Hynix is to spend US$15 billion on a major high-bandwidth memory plant. This announcement comes just weeks after the company revealed plans to establish US operations with a US$4 billion packaging plant.

The semiconductor manufacturer has set an initial completion date of November 2025.(Source: VERTEX SPACE - stock.adobe.com) — The semiconductor manufacturer has set an initial completion date of November 2025.
(Source: VERTEX SPACE - stock.adobe.com)

SK Hynix has announced plans to spend roughly US$15 billion on building a new memory chip complex in South Korea. The company hopes to meet the growing demand for semiconductors used in AI development.

The semiconductor manufacturer intends to set aside US$3.9 billion to begin constructing the new factory towards the end of April and has set an initial completion date of November 2025. By the end of the project, the site’s total investment will surpass US$15 billion as SK Hynix builds the complex with equipment in the long term.

A global race

This massive investment underscores a global race to supply the specialist hardware that’s needed for generative AI services.

SK Hynix currently leads the market for a type of advanced chip called high-bandwidth memory, which is specially tailored for AI, and the company is keen to maintain that advantage. For now, the company is out-competing Samsung Electronics to supply these chips, which work with accelerators designed by Nvidia.

According to SK Hynix, demand for high-bandwidth memory chips is expected to grow by 60 percent annually in the coming years, even as sales of regular DRAM chips continue to grow alongside a proliferation of data centers.

A U.S. chip plant

SK’s announcement comes only weeks after the company revealed plans to spend almost US$4 billion on its first United States facility. The chipmaker said that it will build an advanced packaging plant and research center for AI products in West Lafayette, Indiana, with plans to begin mass production in the second half of 2028.

SK Hynix has also applied for grants from the U.S. Chips and Science Act, which is aimed at promoting domestic semiconductor manufacturing. The project itself marks a significant step forward for the country’s ambitions to add advanced packaging capacity, which has represented a bottleneck in America’s semiconductor industry in the past.

In December, SK Hynix became South Korea’s second-most valuable company, and its shares have risen 27 % since January. Meanwhile, SK Hynix is proceeding with other domestic projects in the Yongin Semiconductor Cluster, where it plans to invest around 120 trillion won in the long term.

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FACTORY EXPANSION SK Hynix to invest US$15 billion in semiconductor expansion

A global race

A U.S. chip plant

Experience power electronics for E-Mobility & Energy Storage

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