SK Hynix to invest $13 billion in new plant amid memory chip shortage
A visitor takes a picture of a model of SK hynix’s high-bandwidth memory (HBM) technology during the 2025 World IT Show in Seoul on April 24, 2025.
Jung Yeon-je | Afp | Getty Images
SK Hynix, a leading memory maker based in South Korea, announced a significant investment of 19 trillion Korean won ($12.9 billion) to construct a new advanced packaging plant. This expansion aims to meet the increasing demands driven by artificial intelligence technologies.
The new facility, set to be located in Cheongju, South Korea, will focus on advanced packaging techniques. This process involves integrating multiple memory chips into a single, high-density unit to enhance performance, energy efficiency, and reduce overall size.
As a key player in the memory chip industry, SK Hynix specializes in high-bandwidth memory (HBM) utilized in artificial intelligence processors, including those developed by U.S. chipmaker Nvidia.
The investment in the new plant aligns with SK Hynix’s strategy to meet the growing demand for HBM amid intensifying global competition in the AI sector. Industry projections suggest a significant expansion in the HBM market, with a compound annual growth rate of 33% expected between 2025 and 2030.
Despite the lucrative opportunities in the AI-driven market, the production of HBM memory is complex and demanding, leading to supply constraints and price hikes. This trend has raised concerns about rising costs in the broader electronics industry.
Furthermore, the investment in HBM production comes at a time when memory prices, including dynamic random access memory (DRAM), are projected to increase by 50% to 55% this quarter compared to the previous year. DRAM is essential for temporary data storage in most computers.
While higher memory prices pose challenges for electronics manufacturers, they have significantly boosted earnings for memory producers like Samsung and SK Hynix. Samsung, for instance, anticipates a nearly tripled operating profit for the December quarter compared to the previous year.
Looking ahead, SK Hynix is considering a potential listing in the U.S. following a successful year in 2025. The company’s stock has shown positive performance, with a 12% increase since the beginning of the year, despite a slight decline in Tuesday’s trading.
