This article first appeared on GuruFocus.
SK Hynix (NASDAQ:SKHY) is about to invest 54 trillion won ($38.1 billion) to build two new memory chip fabrication plants in South Korea as it expands production capacity to meet rising artificial intelligence-driven demand.
SK Hynix said 35.2 trillion won will fund the Y2 fabrication plant in Yongin, while 19.1 trillion won will be invested in the M17 facility in Cheongju. The Yongin site will manufacture high-bandwidth memory (HBM) and next-generation DRAM chips, while the Cheongju plant will focus on NAND flash memory. Construction is scheduled to begin in 2027, with production targeted for 2028 and 2029.
The investment comes as SK Hynix, Samsung Electronics and Micron Technology (MU) race to expand memory output amid robust AI infrastructure spending. High-bandwidth memory is a specialized chip used alongside AI processors to accelerate data processing in servers and data centers.
Industry researcher Counterpoint Research said broader capacity additions from SK Hynix, Samsung, Micron and China’s CXMT are expected through 2028. However, demand for AI memory is projected to outpace new supply, suggesting pricing could remain supported over the next several years.