SK Hynix Inc announces US$15bn chip expansion

SK Hynix Inc plans to spend about US$14.6 billion building a new memorychip complex in South Korea, preparing to meet rapidly growing demand for semiconductors employed in artificial intelligence (AI) development.

The company intends to set aside an initial 5.3 trillion won (US$3.9 billion) to begin constructing a new factory toward the end of this month, aiming for completion by November next year. The total investment on the site would surpass 20 trillion won as SK Hynix fits it out with equipment over the long term, it said in a statement.

SK Hynix, which is to report quarterly results today, is the leader in a type of advanced chip called high-bandwidth memory (HBM) tailored for AI, outcompeting Samsung Electronics Co.

HBM chips work well with accelerators designed by Nvidia Corp, and SK Hynix foresees demand for HBM growing 60 percent annually in coming years, even as sales of regular DRAM climb alongside a proliferation of data centers.

The company plans to locate its newest plant close to its production base in Cheongju. It is also expanding in the US, with plans to spend US$3.9 billion on an advanced packaging plant and research center for AI products in Indiana.

SK Hynix is proceeding with other domestic investments including in the Yongin Semiconductor Cluster, where it is planning to inject about 120 trillion won in the long term.

Separately, Vietnamese tech giant FPT plans to build a US$200 million AI factory using Nvidia technology, the company said on Tuesday, as Vietnam aims to become a semiconductor and AI hub.

Long a low-cost destination to make clothes, shoes and furniture, Vietnam is now eyeing a rapid climb up the global supply chain and has put computer chips at the heart of its development plans.

“FPT is committed to digital transformation, AI, cloud, and education ... working to achieve its vision to turn Vietnam into an AI hub of the world through collaboration with Nvidia in technology, business development, and training,” FPT chairman Truong Gia Binh said in a statement.