SK Hynix pledges $38 billion to build two new DRAM and NAND factories

SK Hynix has announced plans to invest 54 trillion Korean won, or $38.1 billion, in the construction of two new memory chip factories in South Korea. The company, which is the second-largest producer of RAM and NAND chips after Samsung, aims to keep up with the surging demand for memory products driven by the artificial intelligence data center boom.

According to SK Hynix officials, the first cleanroom for production is expected to begin in June 2029. The investment will go towards building a fabrication plant in Yongin, South Korea, to produce HBM and other DRAM products, and a facility in Cheongju to manufacture NAND storage chips. The investment decision was made in response to the rapid growth of market demand, as stated by a SK Hynix representative.

The new facilities are seen as a necessary move given the soaring demand for AI memory products, which has led to price increases and increased profits for companies like Samsung, SK Hynix, and Micron, while causing higher prices for consumer electronics. Despite concerns about a potential bubble burst, SK Hynix is confident in the continued demand for AI products.

However, there is another factor preventing a decrease in memory prices: manufacturers like Samsung and SK Hynix are allocating most of their chips to data center companies, with Micron focusing solely on AI products.