Memory chip giant SK Hynix announced plans on Friday to invest 9.4 trillion Korean won ($6.8 billion) in a new semiconductor manufacturing plant in Yongin, South Korea. This new facility will be part of the Yongin Semiconductor Cluster, a hub for chip operations located just south of Seoul.
This will be SK Hynix’s first manufacturing plant in the Yongin cluster. The company aims to begin construction of the fabrication plant, or fab, in March next year and complete it by May 2027. The investment period is set from August 2024 to the end of 2028. This decision follows SK Hynix’s highest earnings since 2018 and the increasing demand for AI chips, which are highlighted in their recent reports.
South Korea’s SK Hynix, a leading global memory chip maker, has seen recent success with its high-bandwidth memory, which it supplies to Nvidia. At this new facility, it plans to produce next-generation DRAMs, including HBM.
Earlier this year, SK Hynix committed 120 trillion won to build four fabs in the Yongin cluster, with the remaining three to be developed at a later date.
“The Yongin cluster will be the foundation for SK Hynix’s mid-to-long-term growth,” said Kim Young-sik, the firm’s head of manufacturing technology. The expansive 4.2 million sq. m. site will eventually house all four planned chip plants and more than 50 small local firms in the chip industry.
SK Hynix’s investment aims to meet the growing demand for AI semiconductors and secure future growth. The 9.4 trillion won figure is expected to cover work on the first plant until the end of 2028, including utilities such as water and electricity, as well as business support and welfare facilities.
The Yongin Cluster in Wonsam-myeon, Yongin, Gyeonggi Province, is currently undergoing site preparation and infrastructure construction. Once completed, the cluster is expected to become a “Global AI semiconductor production base,” supporting both innovation and co-prosperity with partners. SK Hynix’s initiative will contribute to reviving the national economy by successfully completing this large-scale industrial complex.
With the aggressive investment, SK Hynix and the South Korean government plans to maintain the country’s lead in-memory technology, which is crucial for artificial intelligence applications. Seoul has committed billions of dollars to support its semiconductor ambitions, recognizing the strategic importance of this technology.
SK Hynix has capitalized on the AI boom and its partnership with Nvidia, reporting its highest second-quarter profit in six years. The 9.4 trillion won investment includes various construction costs necessary for the cluster’s initial operation, such as auxiliary facilities, business support buildings, and welfare amenities. The first fab will also feature a “mini-fab,” a research facility that can process 300-mm silicon wafers, allowing domestic chip materials and equipment makers to test their products in a realistic setting.
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