SK hynix Inc. (NASDAQ:SKHY) said Friday it will invest about 54 trillion won (~$39 billion) to expand its artificial intelligence memory production capacity, approving construction of two new semiconductor fabrication plants in South Korea to meet expected long-term demand for AI memory.
AI Memory Expansion Plans
The investment includes 35.2 trillion won for the Yongin “Y2” fabrication plant, which will focus on DRAM production, and 19.1 trillion won for the Cheongju “M17” plant, which will manufacture NAND flash memory. The company said the decision is part of its previously announced mid-to-long-term investment strategy.
SK hynix plans to begin construction of the Yongin Y2 facility in July 2027, with its first cleanroom scheduled to open in June 2029. The fab will produce high-bandwidth memory (HBM) and other next-generation DRAM products. The Cheongju M17 facility is expected to break ground in February 2027 and open its first cleanroom in December 2028.
AI Demand Drives Long-Term Investment
The company cited forecasts from market research firm Omdia projecting both DRAM and NAND demand to grow at a 19% compound annual growth rate through 2030. SK hynix said it views the increase as a structural shift driven by AI rather than a temporary market cycle.
Yongin Cluster And NAND Strategy
The Yongin Semiconductor Cluster is designed to house four fabrication plants. SK hynix said the Y2 project supports its goal of completing the cluster by 2033, 12 years earlier than originally planned.
For NAND, the company said demand for enterprise solid-state drives is accelerating alongside AI adoption, including increased use of key-value cache storage for AI inference workloads. It selected Cheongju for the new fab because existing infrastructure allows for a faster construction timeline.
Production Ramp And Supply Chain Focus
SK hynix said it will expand production capacity in line with customer demand by building the fabs on schedule while installing cleanrooms and manufacturing equipment in phases to maximize capital efficiency.
An SK hynix official said the investment is intended to position the company as a key AI infrastructure partner while supporting the stability of the global AI semiconductor supply chain.
SKHY Price Action: SK hynix shares were trading lower by 2.95% at $139.30 at the time of publication on Friday, according to Benzinga Pro data.
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