With this year’s memory sold out, SK hynix moves ahead with $13B capacity boost

With this year’s entire memory production already sold out or locked in by major clients, SK hynix is ramping up capacity by investing 19 trillion won ($12.9 billion) in a new packaging facility in Cheongju, North Chungcheong.

A rendering of SK hynix's new packaging facility in Cheongju, North Chungcheong [SK HYNIX]

With this year’s entire memory production already sold out or locked in by major clients, SK hynix is ramping up capacity by investing 19 trillion won ($12.9 billion) in a new packaging facility in Cheongju, North Chungcheong.

The Icheon, Gyeonggi-based company, the primary memory supplier to Nvidia, announced the plans on Tuesday as it tries to meet increasing demand for not only high-end high bandwidth memory (HBM) but also more commoditized dynamic random access memory (DRAM) such as DDR5.

The Korean chipmaker said Tuesday that the facility, dubbed P&T7, will be built on a site at the Cheongju Technopolis industrial complex measuring 70,000 pyeong (2.49 million square feet), with construction set to begin in April 2026 and completion targeted for the end of 2027.

The chip producer is also constructing a manufacturing facility, known as M15X, at the same site, with 20 trillion won committed. The M15X facility will operate two clean rooms, which refer to tightly controlled manufacturing spaces for chip production. The first cleanroom began equipment installation last October, with trial operations leading into mass production by February, while the second cleanroom is scheduled for completion by year-end. Full utilization of the plant is projected by mid-2027, with monthly output estimated at around 50,000 wafers.

A blueprint of SK hynix's M15X chip plant in Cheongju, North Chungcheong [SK HYNIX]

SK hynix attributed the capital expenditure increase to surging demand.

“With the global race in AI accelerating, demand for memory used for AI-related servers has surged,” the chipmaker said in a statement.

“HBM, in particular, is projected to grow at an average annual rate of 33 percent between 2025 and 2030, and the need for a proactive response to rising HBM demand is becoming increasingly critical,” it said.

It already secured "full customer demand" for its entire DRAM, including the HBM range and NAND Flash production for 2026, according to an earnings announcement released last October.

"We have now finalized next year’s HBM supply plans with key clients, following the conclusion of discussions that had been a central focus with customers. Due to a sharp rise in infrastructure-driven demand and the competitive edge of our products, our HBM offerings have remained sold out since 2023," said Kim Ki-tae, head of HBM sales and marketing division at SK hynix, during the conference call last October.

The SK hynix executives noted in the conference call that demand for memory currently outpaces supply, with supply-side capacity effectively determining growth.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]