SK Hynix Commits $12.9 Billion to New AI-Focused Advanced Packaging Plant
In a major bet on the sustained growth of artificial intelligence, South Korean memory chip giant SK Hynix announced Tuesday a massive 19 trillion won ($12.9 billion) investment to construct a new advanced packaging facility. The plant will bolster production capacity for high-bandwidth memory (HBM), a critical component for AI processors.
The new facility will be built in Cheongju, South Korea, expanding the company's existing operations in the region. Construction is slated to begin in April, with an expected completion date by the end of 2027. The plant will specialize in advanced packaging technology, a sophisticated process that integrates multiple memory chips into compact, high-performance units essential for meeting AI's demanding power and efficiency requirements.
As a dominant global supplier of HBM—a key element in chips designed by companies like Nvidia—SK Hynix is moving aggressively to secure its leadership position amid fierce industry competition. The announcement follows similar capacity expansion plans unveiled by its rival, Samsung Electronics, in recent months.
The investment is driven by explosive projected demand. SK Hynix cited industry forecasts anticipating the HBM market to grow at a compound annual rate of 33% from 2025 through 2030. This AI-driven surge is reshaping the entire memory landscape.
"The process of producing HBM memory is much more demanding than that for memory used in most consumer electronics," the company noted. As chipmakers pivot resources to meet this specialized demand, the supply of conventional memory has tightened, leading to broad price increases across the sector.
Research firm TrendForce projected last week that average DRAM prices, including HBM, could rise 50% to 55% in the first quarter of 2026 compared to the previous quarter. While these price hikes pressure electronics manufacturers, they have significantly boosted profits for memory producers. Samsung recently forecast a near-tripling of its quarterly operating profit.
Despite a slight dip in its share price Tuesday, SK Hynix's stock has risen approximately 12% year-to-date, buoyed by the AI boom. The company is also reportedly considering a U.S. listing following a standout performance in 2025.
The colossal investment underscores a strategic commitment to capitalizing on the AI "megatrend," positioning SK Hynix at the forefront of supplying the next generation of high-performance computing infrastructure.
