SK Hynix (000660) is significantly expanding its NAND flash production capacity, anchored by its operations in Dalian, China, and Cheongju, South Korea. As the rapid growth of the artificial intelligence (AI) inference market elevates the importance of NAND, the company’s strategy is to simultaneously strengthen both commodity products and next-generation High-Bandwidth Flash (HBF) to seize market leadership. Once both hubs are fully operational, they will provide a combined monthly wafer input capacity of approximately 550,000 units.<\/p>\n
According to industry sources, SK Hynix has fully resumed construction of its second fab in Dalian, a project that had been halted for the past four years. Plans for this facility involve building production lines with a monthly wafer input capacity of 40,000 to 60,000 units, roughly half the capacity of the existing first fab. The goal is to begin moving in production equipment around the end of this year and commence mass production within the first half of next year. Combined, the first and second fabs will secure a total production capacity of around 150,000 wafers per month in Dalian.<\/p>\n
Domestically, the company is developing its Cheongju M17 site as a core hub for advanced NAND. SK Hynix plans to invest 19.1 trillion won (approximately $13.5 billion) in M17, with the first cleanroom scheduled to open by the end of 2028. This facility is slated to produce AI-specific products, including next-generation high-layer-count NAND and HBF. Considering that a typical large-scale NAND fab has a monthly wafer input capacity of around 100,000 units, Cheongju\u2014with its four fabs including M17\u2014could achieve a long-term production capacity of up to 400,000 wafers per month.<\/p>\n
This two-track strategy is a response to the changing memory architecture within AI data centers. Previously, NAND was installed as a supplementary component near compute units (GPUs\/CPUs). However, starting with Nvidia’s next-generation AI computing platform, “Vera Rubin,” NAND-based storage racks are emerging as independent infrastructure. Furthermore, the scope of NAND applications is rapidly broadening, including HBF\u2014which stacks multiple NAND layers to boost data transfer speeds\u2014and Compute Express Link (CXL) memory pools, which serve as remote, large-capacity memory resources.<\/p>\n
SK Hynix is also pursuing a parallel expansion of its global supply chain. While maintaining a strategic partnership as the largest shareholder of Japanese NAND company Kioxia, the company is reviewing the United States as its next production base. SK Group Chairman Chey Tae-won stated last month, during the listing of SK Hynix’s American Depositary Receipts (ADRs), that the company is reviewing candidate sites for new memory fabs worldwide, including in the U.S. SK Hynix is currently building an advanced packaging plant in West Lafayette, Indiana, at a cost of approximately $4 billion (~5.7 trillion won). Just as it linked its Dalian NAND fab with its Chongqing back-end process plant in China, there is speculation that its U.S. investment could expand from back-end packaging to a front-end process fab.<\/p>\n
The company is also accelerating the financing needed for these massive investments. SK Hynix raised approximately $26.6 billion (~37.7 trillion won) through its ADR listing last month and is also reviewing the sale of its stake in its Chongqing back-end processing plant. Market speculation also suggests the possibility that its subsidiary Solidigm could pursue a Nasdaq listing after securing up to $7 billion (~9.9 trillion won) in pre-IPO funding. SK Hynix has announced a total mid-to-long-term investment plan of 1,100 trillion won (approximately $776.5 billion), including 600 trillion won for Yongin, 100 trillion won for Cheongju, and 400 trillion won for Gwangju.<\/p>\n
Meanwhile, U.S. competitor Micron is seeking to differentiate itself by leveraging its monopoly on memory production within the United States. Sumit Sadana, Micron’s Chief Business Officer (CBO), stated at the KeyBanc Capital Markets Technology Leadership Forum on the 10th (local time), “Samsung’s U.S. investment is focused on logic foundry, not memory, and SK Hynix’s investment is in a packaging facility.” He emphasized that “Micron is the only company manufacturing memory in the United States.”<\/p>\n
Samsung Electronics is building a state-of-the-art foundry plant in Taylor, Texas, and plans to begin construction on a second fab there at the end of the year. Sadana highlighted that SK Hynix’s Indiana plant is also a packaging facility, making Micron the sole operator of a memory front-end fab in the U.S. Micron has expanded its U.S. investment from a previous $200 billion (~283.4 trillion won) to $250 billion (~354.2 trillion won). Its first fab in Idaho is targeted to begin operations in mid-next year, with a second fab slated for the end of 2028, while it is also building a plant in New York state. Once these investments are complete, Micron is projected to produce 40% of its DRAM in the United States.<\/p>\n
CBO Sadana also formalized a price premium for American-made memory. “Memory produced in the U.S. will command a price premium,” he said, noting that this premium is already reflected in Strategic Customer Agreements (SCAs) signed with clients. The SCA is a long-term contract model where customers provide an upfront payment in exchange for a five-year memory supply commitment, and it is binding, requiring payment even if the customer does not purchase the agreed-upon volume. After announcing the signing of 16 SCAs in June, Micron disclosed additional agreements on this day. Samsung Electronics and SK Hynix also completed negotiations for Long-Term Agreements (LTAs) with 10 customers last month.<\/p>\n
Addressing moves by major customers like Nvidia to downgrade memory specifications, CBO Sadana attributed this “not to rising memory prices, but to supply shortages.” He explained, “When you multiply the adjusted average memory content by the AI chip shipment volumes customers have planned, total demand is continuously increasing.” He further forecast that “the supply-demand situation in 2027 will be tighter than in 2026.” He also raised the possibility that once the era of customized HBM arrives, customers may consolidate their HBM suppliers to just one or two companies.<\/p>\n
The expansion of the AI inference market is fundamentally changing the status of NAND flash. “In AI inference computation, the key-value (KV) cache\u2014the data that needs to be stored\u2014is growing exponentially, positioning NAND as an AI memory component no less critical than DRAM,” an industry insider said. “It is a crucial time to establish a global production network capable of stably supplying everything from commodity SSDs to next-generation products like HBF.” This context explains both SK Hynix’s simultaneous capacity expansion in Dalian and Cheongju, and Micron’s push to expand long-term contracts using its monopolistic position in the U.S. as leverage.<\/p>\n","protected":false},"excerpt":{"rendered":"SK Hynix (000660) is significantly expanding its NAND flash production capacity, anchored by its operations in Dalian, China,…\n","protected":false},"author":2,"featured_media":115581,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[57562,134,59584,13064,9464,1485,276,241,275,59585,444],"class_list":["post-115580","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sk-hynix","tag-cheongju-m17","tag-china","tag-dalian-fab-2","tag-hbf","tag-kioxia","tag-micron","tag-samsung-electronics","tag-sk","tag-sk-hynix","tag-sumit-sadana","tag-united-states"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/115580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=115580"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/115580\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/115581"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=115580"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=115580"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=115580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}