April 25, 2024 /SemiMedia/ -- SK hynix Inc. announced today that it plans to expand production capacity of the next-generation DRAM including HBM, a core component of the AI infrastructure, in response to the rapidly increasing demand for AI semiconductors.

As the board of directors approves the plan, the company will build the M15X fab in Cheongju, North Chungcheong Province, for a new DRAM production base, and invest about 5.3 trillion won for fab construction.

The company plans to start construction at the end of April with an aim to complete in November 2025 for an early mass production. With a gradual increase in equipment investment planned, the total investment in building the new production base will be more than 20 trillion won in the long-term.

As a global leader in AI memory, SK hynix expects the expansion in investment to contribute to revitalizing the domestic economy, while refreshing Korea’s reputation as a semiconductor powerhouse.

With the advent of the AI era, the semiconductor industry believes that the DRAM market has entered a mid- to long-term growth phase. Along with HBM, which is expected to grow more than 60% annually, the company forecasts that demand for general DRAM will be on a steady rise led by high-capacity DDR5 module products for servers.

As HBM requires at least twice as large capabilities to secure the same production as general DRAM products, SK hynix decided that increasing DRAM capabilities with a focus on HBM is a precondition for future growth.

The company plans to produce new DRAM from the M15X in Cheongju before the completion of the first fab in Yongin Semiconductor Cluster in the first half of 2027. Being located near the M15, which has been expanding TSV1 capabilities, the M15X is the best conditioned for optimization of HBM production.

Separately, SK hynix will proceed with other domestic investments including the Yongin Semiconductor Cluster, where it will to inject approximately 120 trillion won, as planned.

The Yongin project is gaining speed with the process rate for groundwork marking 26%, which is 3% faster than the target. Major preparatory works including land compensation procedures and investigation of cultural properties have been completed, and construction of the infrastructure ranging from power and water to roads is also gaining speed. The company plans to start construction of the first fab in Yongin in March next year and complete it in May 2027.

Since incorporation into SK Group in 2012, SK hynix has invested an accumulated 46 trillion won since 2014 to build three new fabs — M14 in Icheon, M15 in Cheongju in 2018, and M16 in Icheon in 2021 – in Korea in accordance with its Future Vision initiative.

SK hynix expects that the investment for the M15X and Yongin Cluster to help advance Korea to a stronger AI semiconductor powerhouse, while providing a momentum to vitalize the local economy.

“With transformation into a key facility that supplies AI memories to the world, M15X will play a pivotal role as stepping stone connecting the company’s present and future,” said Kwak Noh-Jung, President and CEO of SK hynix. “We are confident that this investment will be a giant leap that goes beyond the private sector for contribution to the future of the broader domestic economy.”