GoKawiilSK Hynix said on Friday it will invest 54 trillion Korean won ($38.1 billion) to build two new memory chip manufacturing plants, as demand for the components, which are key to AI, continues to grow.
The South Korean tech giant announced a 35.2 trillion won investment in a fabrication plant, or fab, in Yongin called "Y2," with 19.1 trillion won earmarked for a facility in Cheongju called "M17."
It comes amid a surge in memory prices driven by a shortage of supply and huge demand from companies building AI infrastructure like data centers and chip firms such as Nvidia, which require large amounts of high-bandwidth memory (HBM).
The surge in memory prices has led to the biggest producers of the product — SK Hynix, Samsung and Micron — seeing a massive rally in their share prices as investors bet the supply imbalance will persist for some time.
SK Hynix is facing increasing competition from Samsung, which has reclaimed the number one spot by market share in the dynamic random access memory, or DRAM, market in the second quarter, according to Counterpoint Research. DRAM is a type of memory that is in particularly high demand.
"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," Neil Shah, vice president of research and co-founder of Counterpoint Research, told CNBC.
"Looking at the broader market, multi-vendor expansions from Samsung, SK Hynix, Micron, and CXMT will expand global supply significantly through 2028. Yet with demand growing even faster than planned capacity, memory prices are unlikely to soften before the end of 2028."