South Korean memory manufacturer SK Hynix is investing approximately $12.9 billion in the construction of a new factory for advanced packaging. With this investment, the company aims to expand its production capacity to capitalize on the rapidly growing demand for memory chips for artificial intelligence applications.
This has been reported by Reuters and CNBC. The company is building the new factory in the city of Cheongju, where SK Hynix already has several production sites. According to the company, construction will begin in April. Completion is scheduled for the end of 2027. The choice of Cheongju is in line with the group’s existing infrastructure and knowledge base in that region.
The facility will focus on advanced packaging, a technique in which multiple memory chips are combined into a single compact, high-density module. This approach enables higher performance, reduces energy consumption, and reduces the physical size of the memory. Such features are particularly important for modern AI systems, which need to process large amounts of data within limited energy and space budgets.
Market leader in high-bandwidth memory
SK Hynix is one of the world’s largest manufacturers of memory chips and has a leading position in high-bandwidth memory (HBM). This type of memory is widely used in AI processors, including those from US chip designer Nvidia. According to market data from Macquarie Equity Research, SK Hynix accounted for approximately 61 percent of the global HBM market last year, well ahead of competitors Samsung Electronics and Micron.
The company says that global competition in the field of artificial intelligence is growing rapidly, leading to strong growth in demand for specialized memory. SK Hynix sees it as necessary to stay ahead of that demand by investing in additional HBM production capacity in a timely manner.
The growing demand for HBM has recently driven up prices for this type of memory, making the segment particularly profitable for memory manufacturers. At the same time, the production of HBM is considerably more complex than that of traditional memory for consumer electronics. As chipmakers shift their production towards AI memory, pressure is mounting on the availability of conventional memory chips.
Research firm TrendForce expects average prices for dynamic random-access memory, including HBM, to rise 50 to 55 percent this quarter compared to the fourth quarter of 2025. DRAM is the primary working memory in most computers and servers and thus plays a central role in the broader electronics industry.
Higher memory prices are increasing costs for electronic equipment manufacturers, but are benefiting memory producers. Samsung Electronics recently announced that it expects operating profit for the December quarter to nearly triple compared to a year earlier.
Against this backdrop, SK Hynix is also exploring strategic options for the capital market. The company is considering a possible listing in the United States, following a strong year on the South Korean stock market.