SK Hynix to invest nearly US$13 billion in chip packaging plant in South Korea

[SEOUL] SK Hynix Inc. plans to spend 19 trillion won (S$16.6 billion) building a new advanced chip packaging facility, kicking off a major expansion aimed at meeting surging demand from AI applications.

The South Korean company will begin construction of the complex in the southern city of Cheongju in April with the aim of completion by the end of 2027, according to a statement on the chipmaker’s website. SK Hynix is the world’s leading supplier of high-bandwidth memory for Nvidia Corp.’s AI accelerators.

The outlay comes as a tightening global memory supply threatens to constrain AI investment. Demand for HBM and other advanced memory chips has surged faster than anticipated as data center buildouts accelerate.

Memory — once treated as a commoditised component — has become a bottleneck that directly limits how quickly data centers can bring new AI accelerators online. Suppliers are seeking to boost output of more advanced chips, but long qualification cycles, complex packaging, and limited fabrication capacity mean shortages are likely to persist, keeping pricing firm and giving memory makers unusual leverage over customers.

That imbalance is prompting major memory producers like SK Hynix, Samsung Electronics Co. and Micron Technology to rethink capital expansion plans and accelerate investments in advanced packaging lines.

SK Hynix expects the HBM market to grow at an average annual rate of 33 per cent from 2025 to 2030.

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“The importance of proactively responding to rising HBM demand is becoming increasingly critical,” the company said in the statement.

Chey Tae Won, chairman of SK Hynix parent SK Group, warned of tight supply in November. “We have entered an era in which supply is facing a bottleneck,” Chey said in a keynote speech at the SK AI Summit in Seoul. “We are receiving memory chip supply requests from many companies, and we are thinking hard about how to address all demands.” BLOOMBERG