SK Hynix said Friday it will spend $38.1 billion to build two new memory chip plants in South Korea, with construction on both facilities set to begin in early 2027 and production targeted for 2028 and 2029, as AI-driven demand strains global memory supply.
SK Hynix announced Friday it will invest 54 trillion Korean won, equivalent to $38.1 billion, to construct two new memory chip manufacturing plants, underscoring the scale of capital commitment the global AI buildout is extracting from semiconductor suppliers.
The South Korean chipmaker said it will allocate 35.2 trillion won toward a fabrication plant in Yongin, designated "Y2," and 19.1 trillion won toward a facility in Cheongju, designated "M17." Both plants are designed to address surging demand for memory components critical to AI infrastructure, including data centers and chips produced by companies such as Nvidia.
The Yongin Y2 plant — the second of four fabs SK Hynix has planned within the Yongin Semiconductor Cluster — will break ground in July 2027, with its first cleanroom scheduled to open in June 2029. The company said it will serve as a production base for high-bandwidth memory and other next-generation DRAM products.
The Cheongju M17 facility will produce NAND memory, a category for which "demand is surging rapidly," the company said in a press release. Construction there is set to begin in February 2027, with the first cleanroom opening in December 2028.
"In the AI era, technological competitiveness alone is not enough and the ability to supply the required volume at the exact moment customers need it is the ultimate competitive advantage," SK Hynix said in the release. "We reached this investment decision after a thorough review of market demand."
The announcement comes as memory prices have risen sharply amid tight supply and accelerating demand from AI infrastructure builders. The trend has lifted share prices across the three dominant memory producers — SK Hynix, Samsung, and Micron — as investors anticipate that the supply-demand imbalance will persist.
SK Hynix is also contending with a more competitive landscape. Samsung reclaimed the top position by market share in the dynamic random access memory market in the second quarter, according to Counterpoint Research, edging out SK Hynix in a segment where both companies have been aggressively expanding.
"This has prompted SK Hynix to inject fresh capex to expand its footprint. In the near term, this won't alter SK Hynix's output but is built for 2029 and beyond," said Neil Shah, vice president of research and co-founder of Counterpoint Research, in remarks to CNBC.
Shah added that multi-vendor expansions from Samsung, SK Hynix, Micron, and CXMT will grow global supply significantly through 2028, but that demand is growing fast enough to keep prices from softening before the end of that year.
The two new plants form the latest tranche of a broader capital program SK Hynix calls its "master plan," announced last year, which envisions 600 trillion won in investment in the Yongin Semiconductor Cluster and 100 trillion won to expand its Cheongju production base.
China's role in the global memory and chip supply chain came into sharper focus Friday as well, with official customs data showing the country's integrated circuit exports by value nearly doubled in the first seven months of 2026 compared with the same period a year earlier. In July alone, chip exports surged 117% year on year, reflecting the same AI-driven infrastructure demand that is propelling SK Hynix's expansion plans.
With fabrication timelines stretching to 2028 and 2029, the capacity SK Hynix is commissitting today will not reach production at scale for several years — a lag that analysts say is likely to keep memory markets tight well into the next decade.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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