SK hynix is accelerating its expansion of semiconductor manufacturing capacity to capture growing demand for artificial intelligence (AI) memory, announcing a combined investment of about KRW 54 trillion ($40 billion) in new fabrication plants in Yongin and Cheongju.
The company said on Aug. 7 that its board approved investments of KRW 35.2 trillion for the construction of the Y2 fab at the Yongin Semiconductor Cluster and KRW 19.1 trillion for the M17 fab at its Cheongju campus.
The investment reflects SK hynix’s strategy to secure long-term production capacity as AI drives structural growth in the global memory market. Rather than viewing the current semiconductor boom as a temporary cycle, the company believes memory is becoming a critical infrastructure component that directly determines AI performance.
According to market research firm Omdia, demand for both DRAM and NAND is expected to grow at an annual average rate of about 19% from 2025 through 2030, supported by expanding AI data centers and increasing computing workloads.
Industry analysts said the investment represents a strategic move by SK hynix to maintain its leadership in high-performance AI memory while strengthening its broader semiconductor ecosystem. As demand for AI accelerators and data centers continues to rise, the ability to secure stable supply capacity has become a key competitive factor alongside technology leadership.
<>Yongin Y2 to Become Key Hub for HBM and Advanced DRAM
The Y2 facility will become the second fab built within SK hynix’s Yongin Semiconductor Cluster and will focus on advanced DRAM production, including next-generation products such as High Bandwidth Memory (HBM).
The facility will cover approximately 341,000 pyeong of floor space and is scheduled to begin construction in July 2027. The company aims to open its first cleanroom in June 2029.
SK hynix is currently constructing the first Yongin fab, Y1, with the initial cleanroom scheduled to open in February 2027. The company plans to complete all four planned fabs at the Yongin cluster by 2033, bringing forward the original completion timeline by more than a decade.
The Y2 investment also includes supporting infrastructure such as employee facilities, an integrated research and development center for product testing and analysis, water treatment facilities, power infrastructure and logistics facilities.
<>Cheongju M17 to Support Growing AI NAND Demand
The M17 fab in Cheongju will focus on expanding NAND production capacity as demand rises for enterprise SSDs used in AI data centers.
AI workloads are driving increased demand for high-capacity storage solutions, while emerging applications such as AI inference and agent-based AI are creating additional needs for NAND-based memory systems, including storage solutions for KV cache data.
SK hynix selected Cheongju as the location for the new NAND facility due to its existing manufacturing infrastructure. The company already operates NAND production facilities including M11, M12 and M15 at the Cheongju campus, allowing M17 to benefit from existing facilities, utilities and operational expertise.
The M17 fab will span approximately 206,000 pyeong and is scheduled to begin construction in February 2027, with the first cleanroom expected to open in December 2028.
<>Flexible Expansion Strategy Based on Market Demand
SK hynix emphasized that the investment is aimed at securing future growth opportunities while maintaining investment efficiency. The company plans to build manufacturing infrastructure in advance but will adjust cleanroom expansion and equipment installation according to actual customer demand.
The strategy reflects the changing dynamics of the AI semiconductor market, where companies are competing not only on chip performance but also on their ability to deliver products at the right time and scale.
Analysts said the investment strengthens SK hynix’s position in the global AI semiconductor supply chain, particularly as demand for HBM and AI server memory continues to expand. The move is also expected to benefit Korea’s semiconductor ecosystem by creating new opportunities for suppliers, equipment companies and local economies.
“AI is transforming memory from a component into a core infrastructure technology,” an industry analyst said. “Companies with both advanced technology and sufficient production capacity will have an advantage as the AI market matures.”
An SK hynix spokesperson said, “This investment is a proactive decision to capture growth opportunities created by the AI era. We will continue strengthening our production capabilities and technology competitiveness to become a key partner in the global AI semiconductor supply chain.”
