SK Hynix to invest $13 billion in new plant amid memory chip shortage

South Korea-based reminiscence maker SK Hynix introduced Tuesday it can make investments 19 trillion Korean gained ($12.9 billion) to construct a brand new superior packaging plant, because it expands manufacturing to satisfy rising calls for tied to synthetic intelligence. 

The brand new facility can be situated within the Korean metropolis of Cheongju, constructing on the corporate’s current footprint there. Building is about to start in April, with completion focused for the tip of 2027, the agency stated in a statement.

The plant will concentrate on superior packaging, which includes combining a number of reminiscence chips right into a single, high-density unit to enhance efficiency and vitality effectivity whereas lowering total dimension.

SK Hynix is among the many world’s largest producers of reminiscence chips and leads in so-called high-bandwidth reminiscence (HBM), which is utilized in synthetic intelligence processors, together with these designed by U.S. chipmaker Nvidia. 

The funding comes as SK Hynix seeks to satisfy rising demand for HBM as international AI competitors intensifies, a pattern that has pushed up costs and made it profitable for reminiscence giants.

SK Hynix rival Samsung Electronics has additionally introduced plans to ramp up HBM manufacturing in current months.

In keeping with business projections cited by SK Hynix, the HBM market is anticipated to develop at a compound annual progress fee of 33% between 2025 and 2030.

Nonetheless, the method of manufacturing HBM reminiscence is far more demanding than that for reminiscence utilized in most shopper electronics. As chipmakers shift to satisfy AI-driven demand, provides of standard reminiscence have tightened, contributing to cost hikes and elevating issues about greater prices throughout the broader electronics business.

TrendForce, a Taipei-based tech analysis agency, stated final week that it expects common dynamic random entry reminiscence costs, together with HBM, to rise by 50% to 55% this quarter in contrast with the fourth quarter of 2025.

Dynamic Random Entry Reminiscence, or DRAM, usually refers back to the major, unstable reminiscence present in most computer systems for non permanent information storage.

Whereas greater reminiscence costs have created challenges for electronics producers, they’ve boosted earnings for reminiscence producers. Samsung said final week it expects working revenue for the December quarter to just about triple from the identical interval final 12 months.

In the meantime, SK Hynix is weighing a potential U.S. listing following a blockbuster 2025 for its shares in South Korea. The inventory is up about 12% for the reason that begin of this 12 months, although it fell roughly 2.5% in Tuesday buying and selling.