SK Hynix Announces $38.4 Billion Investment Plan to Accelerate AI Chip Expansion

TradingKey - On August 7, SK Hynix announced that it will invest a total of 54 trillion won (approximately $38.4 billion) in its two major production bases in Yongin and Cheongju, South Korea, to build next-generation memory chip capacity to cope with the long-term demand growth driven by the rapid development of artificial intelligence.

According to the announcement, the company plans to invest 19.1 trillion won in the Cheongju M17 fab by the end of April 2031, and 35.2 trillion won in Y2, the second fab of the Yongin semiconductor cluster, by the end of October 2031.

SK Hynix stated that as applications such as generative AI, AI inference, and Agentic AI continue to proliferate, demand for high-performance memory continues to grow rapidly. The company believes that in the AI era, relying solely on technological leadership is no longer sufficient to establish a competitive advantage; more crucial is the ability to provide adequate capacity at the time clients need it, prompting the decision to plan manufacturing capacity ahead of schedule.

In fact, this investment is also an important part of the company's overall capacity expansion plan. In June this year, SK Hynix announced a long-term investment blueprint covering the Yongin semiconductor cluster and the Cheongju campus, under which the total planned investment for the Yongin project is approximately 600 trillion won, and the expansion investment for the Cheongju base is about 100 trillion won. The completion date for all four fabs in the Yongin industrial park was moved forward to 2033, significantly ahead of the original plan. With the official launch of the Y2 and M17 projects, it means both major production bases have entered a new phase of construction.

In terms of construction progress, the first fab in Yongin, Y1, is currently progressing as scheduled, with its first cleanroom expected to be put into use in February next year. Y2, which will undertake the second-phase expansion, is scheduled to start construction in July next year, with its first cleanroom expected to open in June 2029.

Cheongju, on the other hand, has a relatively mature industrial foundation, with multiple NAND production facilities such as M11, M12, and M15 already established in the campus. The newly built M17 can directly share existing water, electricity, and supporting resources, thereby shortening the construction cycle and reducing costs. According to the plan, M17 will start construction in February next year, with the first cleanroom expected to be put into use by the end of 2028, and the overall investment cycle will continue until 2031.

Notably, this investment not only includes the main fab structure but also covers R&D centers, office facilities, employee support buildings, and infrastructure such as power supply, water supply, water treatment, and warehousing, reserving space for subsequent continuous expansion.

SK Hynix stated that it will proceed with factory construction based on mid-to-long-term demand forecasts formulated through communication with clients, while cleanroom expansion and equipment installation will be implemented in phases in line with market changes, balancing capacity expansion with capital efficiency to avoid overly rapid upfront spending.