South Korea-based memory maker SK Hynix said on Tuesday that it would spend 19 trillion Korean won ($12.9 billion) to construct a new high-end packaging facility, as it increases manufacturing capacity to satisfy the growing demands associated with artificial intelligence.
This new plant will be set up in the Korean town of Cheongju, which already has a presence of the company. The firm announced in a statement that the construction will start in April, and completion is planned at the end of 2027.
The plant will prioritize advanced packaging, which entails the integration of a number of memory chips into one, but at a high-density unit to enhance performance and energy savings, besides minimizing the size.
SK Hynix is one of the largest manufacturers of memory chips in the world, and the pioneer in so-called high-bandwidth memory (HBM), found in artificial intelligence processors, such as those produced by the U.S. chipmaker Nvidia.
The investment is made after SK Hynix is pursuing the rising demand of HBM despite increasing global AI rivalry, a phenomenon that has driven costs higher, and it has become profitable for memory leaders.
In recent months, SK Hynix competitor Samsung Electronics has stated it plans to increase HBM production. The HBM market is projected to experience a compound annual growth rate of 33 percent between 2025 and 2030, according to industry estimates quoted by SK Hynix.
However, the manufacturing process of HBM memory is significantly more rigorous than that of memory applicable in the majority of consumer electronics. With chipmakers moving to fulfill AI-related demand, stocks of traditional memory have become constrained, which leads to price increases and concerns of increased costs throughout the wider electronics sector.
TrendForce, a Taiwan-based tech research company, last week predicted average dynamic random access memory prices, including HBM, to increase by 50 to 55 percent this quarter over fourth-quarter 2025.
Dynamic Random Access Memory, or DRAM, typically describes the primary volatile memory in the majority of computers, where data is temporarily stored. Although increased prices of memory have posed a challenge to the electronic manufacturers, they have increased the profits of memory producers.
Samsung stated its plans last week that operating profit in the December quarter would almost triple that in the same quarter of last year. SK Hynix is considering a U.S. listing after its shares in South Korea have a blockbuster listing in 2025.
Thus, the share is up by nearly 12 percent since the beginning of this year, but dropped by approximately 2.5 percent on Tuesday.
