SK Hynix said accelerating global competition in AI is driving a sharp rise in demand for AI-focused memory, underscoring the need to respond proactively to growing demand for high-bandwidth memory (HBM) chips.
South Korea based memory maker SK Hynix announced Tuesday it will invest 19 trillion Korean won ($12.9 billion) to build a new advanced packaging plant, as it expands production to meet rising demands tied to artificial intelligence.
The new facility will be located in the Korean city of Cheongju, building on the company’s existing footprint there. Construction is set to begin in April, with completion targeted for the end of 2027, the firm said in a statement.
South Korea’s SK Hynix Invest 19 Trillion to Build Chip Packaging Plant
South Korea’s SK Hynix said on Tuesday it has decided to invest 19 trillion won ($12.90 billion) to build an advanced chip packaging plant in South Korea to meet rising memory chip demand related to artificial intelligence.
The chipmaker said in a statement that the construction of the new factory will begin in April, with completion targeted by the end of next year.
SK Hynix said accelerating global competition in AI is driving a sharp rise in demand for AI-focused memory, underscoring the need to respond proactively to growing demand for high-bandwidth memory (HBM) chips.
The plant will focus on advanced packaging, which involves combining multiple memory chips into a single, high-density unit to improve performance and energy efficiency while reducing overall size.
SK Hynix World’s Largest Producers of Memory Chips
SK Hynix is among the world’s largest producers of memory chips and leads in so called high bandwidth memory (HBM), which is used in artificial intelligence processors, including those designed by U.S. chipmaker Nvidia.
The investment comes as SK Hynix seeks to meet growing demand for HBM as global AI competition intensifies, a trend that has pushed up prices and made it lucrative for memory giants.
SK Hynix rival Samsung Electronics has also announced plans to ramp up HBM production in recent months. According to industry projections cited by SK Hynix, the HBM market is expected to expand at a compound annual growth rate of 33% between 2025 and 2030.
HBM – Dynamic Random Access Memory
HBM – a type of dynamic random access memory or DRAM standard first produced in 2013 – involves stacking chips vertically to save space and reduce power consumption, helping to process the large volumes of data generated by complex AI applications.
However, the process of producing HBM memory is much more demanding than that for memory used in most consumer electronics. As chipmakers shift to meet AI-driven demand, supplies of conventional memory have tightened, contributing to price hikes and raising concerns about higher costs across the broader electronics industry.
TrendForce, a Taipei-based tech research firm, said last week that it expects average dynamic random access memory prices, including HBM, to rise by 50% to 55% this quarter compared with the fourth quarter of 2025.
Meanwhile, SK Hynix is weighing a potential U.S. listing following a blockbuster 2025 for its shares in South Korea. The stock is up about 12% since the start of this year, though it fell roughly 2.5% in Tuesday trading.
