Nvidia's memory manufacturer invests $38 billion in production due to growing chip demand
The South Korean company will increase capacity in Yongin and Cheongju amid a surge in demand for memory for artificial intelligence systems.
SK Hynix's board of directors approved an investment of 54.3 trillion won, or about $38.2 billion, in expanding semiconductor production in South Korea.
Of the total amount, 35.2 trillion won will be directed to new production facilities in Yongin, located south of Seoul. Another 19.1 trillion won will be invested by the company in plants in Cheongju in the central part of the country.
The decision is part of SK Hynix's medium- and long-term strategy for increasing memory chip production. The company explained the investment as the result of assessments of future demand.
According to a forecast by research firm Omdia, global demand for DRAM and NAND - the two main types of memory - will grow at an average of 19% annually by 2030.
The expansion is intended to strengthen SK Hynix's production base for manufacturing HBM high-bandwidth memory and other advanced components used in artificial intelligence accelerators and data centers.
SK Hynix is one of the main suppliers of HBM to Nvidia. In the global market for such memory, the company competes primarily with Samsung Electronics and American Micron Technology.
In the long term, SK Hynix plans to allocate a total of about 700 trillion won for the development of sites in Yongin and Cheongju. The actual volumes and timelines of subsequent stages will depend on demand and investment efficiency.
The company previously also announced a large-scale expansion of facilities in Cheongju. It involves the creation of a new NAND memory production facility M17 and an advanced chip packaging plant P&T7.
The construction of M17 is planned to begin in 2027, with production expected in the first half of 2029. The packaging plant P&T7 is expected to be completed by the end of 2027.
Based on materials: Bloomberg, The Wall Street Journal, SK Hynix
