SK Hynix Announces $13 Billion Investment in New Plant Due to Memory Chip Shortage

• The HBM market is projected to grow at a compound annual growth rate of 33% between 2025 and 2030, driven by intensifying global AI competition
• SK Hynix is the world's leading producer of high-bandwidth memory chips, which are used in AI processors including those designed by Nvidia
• The shift to AI-focused memory production has strained supplies of conventional memory chips, prompting SK Hynix and rival Samsung Electronics to expand production capacity

SK Hynix Announces $13 Billion Investment in Advanced Packaging Plant

South Korean memory chipmaker SK Hynix announced Tuesday a 19 trillion Korean won ($12.9 billion) investment to build a new advanced packaging facility in Cheongju, South Korea. Construction begins in April 2025, with completion targeted for end of 2027.

Key Investment Drivers:

The expansion addresses surging demand for high-bandwidth memory (HBM) chips driven by the artificial intelligence boom. SK Hynix currently leads the global HBM market, supplying memory for AI processors including those made by Nvidia. The HBM market is projected to grow at a 33% compound annual growth rate from 2025 to 2030, according to industry projections cited by the company.

Market Context:

The shift toward AI-focused production has created shortages in conventional memory chips, raising concerns about broader electronics industry impacts. SK Hynix and rival Samsung Electronics are both expanding production capacity to address these supply constraints.

Technical Details:

The new facility will focus on advanced packaging and testing—a process that combines multiple memory chips into high-density units to enhance performance and energy efficiency while reducing size. This technology is critical for next-generation AI applications.

Market Implications:

The substantial investment underscores the lucrative nature of the AI memory market, with rising prices making HBM production highly profitable for memory manufacturers. The expansion should help alleviate memory supply constraints while positioning SK Hynix to capitalize on continued AI infrastructure buildout. The move also signals intensifying competition in the HBM space, with major players racing to secure market share in this high-growth segment.