South Korea’s SK Hynix announced a big expansion on Tuesday, committing 19 trillion won to build an advanced facility in Cheongju for packing chips.
The plant targets surging demand for high-bandwidth memory chips used in systems deploying artificial intelligence.
The deal, worth $12.9 billion, ranks among the largest investments by the company.
It reflects the increasing demand for high-performance memory in AI accelerators from clients such as Nvidia.
SK Hynix has 61% of the market, compared to 19% for Samsung and 20% for Micron.
Cheongju Facility Construction Schedule
Construction of the new fab, named P&T7, begins this April 2026, with an expected completion in late 2027.
The site covers 70,000 square meters in Cheongju Techno Valley; SK Hynix already builds fabs there.
That creates a full-cycle hub incorporating front-end fabrication and back-end packaging for HBM, DRAM and NAND flash.
The facility has a focus on advanced packaging-stacking chips vertically to enable faster data rates at lower power use.
This technology is crucial as AI workloads increase in complexity, demanding compact high-performance modules.
SK Hynix’s Market Position in HBM
SK Hynix is at the forefront in the field of HBM. It provides Nvidia and other AI chip manufacturers with HBM.
The estimated annual growth in the company’s requirements for HBM from 2025 to 2030 is 33%.
The new investments include an M15X fab in Cheongju with an outlay of 20 trillion won for next-generation
Integration efforts in Cheongju mean less reliance on other partners, and this enhances efficiency and control.
Such emphasis on domestic development solves the issue of risk associated with the global supply chain in the wake of U.S.-China
Alignment with National Chip Strategy
It is an initiative that helps South Korea sustain its position as a leader when it comes to semiconductors.
Benefits offered by the government to industries that incorporate AI-related technology include tax incentives and infrastructure support.
Seoul plans to spend more than 700 trillion won of its investments on semiconductors by 2047.
“The increasing global rivalry in AI has led to a drastic increase in the demand for AI-specialized memory,” according to SK Hynix.
The new factory is expected to help Cheongju become the hub for AI memory.
Competitive Landscape in Memory Chips
Rivals Samsung and Micron have increased HBM investments as well. Samsung started the Pyeongtaek facility for DRAM.
Micron has expanded its production in the face of AI-related shortages.
The global expenditure on infrastructure for artificial intelligence is projected to reach 758 billion USD by 2029.
The expenditure on the data center infrastructure alone may reach 6.7 trillion USD by 2030.
Next Steps in SK Hynix’s Global Expansion
SK Hynix continues to invest, including the $3.87 billion US plant to be located in Indiana.
It aims to complete an entire HBM production process. Industry analysts note the strategic play by SK Hynix to gain advantage in the AI arms race.
