SK Hynix to Invest 54 Trillion Won in New Semiconductor Facilities

SK Hynix will invest a total of 54 trillion won in new semiconductor production facilities in Yongin and Cheongju to meet the surging demand for memory in the age of artificial intelligence (AI). The company anticipates a structural increase in demand for next-generation DRAM, including high-bandwidth memory (HBM), and enterprise SSDs, prompting proactive measures to secure large-scale production capacity.

On August 7, SK Hynix announced during a board meeting that it has approved investments of 35.2 trillion won for the DRAM production plant (Y2) in the Yongin semiconductor cluster and 19.1 trillion won for the NAND flash production plant (M17) in Cheongju. The total investment amounts to 54.3 trillion won.

This investment follows the company's mid- to long-term investment strategy announced in June. SK Hynix plans to invest a total of 600 trillion won in the Yongin semiconductor cluster and 100 trillion won to expand its Cheongju production base, with construction of the Yongin Fab 1 (Y1) currently underway. This decision marks the beginning of subsequent production facility construction in both Yongin and Cheongju.

Y2 will be the second production facility among four planned in Yongin, covering a total area of 341,000 pyeong and designed as a next-generation DRAM production base. Construction is set to begin in July 2024, with the first cleanroom expected to open in June 2029, producing next-generation AI memory, including HBM. The ongoing construction of Y1 aims to open its first cleanroom by February 2024.

SK Hynix has previously stated its goal to complete all four fabs in the Yongin semiconductor cluster by 2033, advancing the original completion date from 2045 by 12 years. The decision to invest in Y2 is a key step in this early completion strategy, with investment execution planned to occur sequentially by October 2031.

The Y2 investment includes costs for not only the production facility but also an integrated research and development center, employee support housing, water treatment facilities, and power substations. The infrastructure for the first phase of power and water supply necessary for Y2's operation is currently about 99% complete, providing a solid foundation for timely factory construction.

In Cheongju, the new M17 fab is being developed to respond to the rapidly increasing NAND demand in the AI era. M17 will cover an area of 206,000 pyeong and is scheduled to begin construction in February 2024, with the first cleanroom expected to open in December 2028. The investment period extends until April 2031.

Cheongju was chosen as a new production hub due to its synergy with existing facilities. The region already hosts operational NAND production plants M11, M12, and M15, and significant infrastructure, including power and water supply, is already in place, allowing for the fastest possible expansion of production capacity.

The company's large-scale investment is driven by confidence in the structural growth of the AI market. According to market research firm Omdia, the global DRAM and NAND markets are projected to grow at an average annual rate of 19% from last year through 2030. As generative AI expands into AI inference services, demand for HBM, server DRAM, and enterprise SSDs is also rapidly increasing. The demand for KV cache storage used in AI inference processes, as well as the spread of agentic AI and physical AI, is expected to further broaden the application of NAND.

SK Hynix believes that in the AI era, not only technological capability but also the ability to supply the required quantities at the right time will be key competitive advantages. Therefore, while proceeding with fab construction as planned, the company aims to enhance investment efficiency by gradually expanding cleanroom construction and equipment installation in line with customer demand.

The company expects that this investment will secure a foundation for future growth while enhancing the competitiveness of the domestic semiconductor ecosystem and revitalizing the local economy. The simultaneous large-scale investments in Yongin and Cheongju are anticipated to create opportunities for the growth of partner companies, generate employment, and stimulate local businesses, contributing to sustainable national economic growth.

A SK Hynix official stated, "This investment is a strategic decision to seize opportunities in line with the rapid growth of the AI market. We aim to establish ourselves as a key partner contributing to the stability of the global AI semiconductor supply chain through proactive production capacity acquisition."