SK Hynix invests $13 billion to build a factory to address HBM shortage.

South Korean chipmaker SK Hynix announced on Tuesday that it plans to invest 19 trillion won (approximately $12.9 billion) to build a new advanced packaging factory to address the surging demand for high-bandwidth memory (HBM) driven by the rapid development of artificial intelligence technology.

According to the statement, the new plant will mainly focus on advanced packaging technology, a key aspect of boosting chip performance and energy efficiency. The facility will be located in Cheongju, South Korea, and will expand upon the company’s existing production layout. SK Hynix stated that construction will begin in April this year and is expected to be completed and start production by the end of 2027, which will significantly enhance its ability to integrate multiple memory chips into a single high-density unit.

As a global leader in memory chip production, SK Hynix currently dominates the HBM market, a technology that serves as a core component for AI processors from companies like Nvidia. As the global AI race intensifies, demand for high-performance memory chips continues to climb, not only driving up product prices but also prompting major memory giants to accelerate capacity expansion. This massive investment by SK Hynix is aimed at meeting this long-term upward trend.

Market analysts point out that this move not only strengthens SK Hynix’s competitiveness in the high-end memory sector, but also reflects how capital expenditure in the semiconductor industry is shifting toward AI-related infrastructure. This strategic expansion comes as its main rival, Samsung Electronics, recently announced an increase in HBM output, indicating that industry competition will heat up further, and may profoundly impact the cost of the global electronics supply chain.

Betting on AI-Driven Market Growth

The core logic behind SK Hynix’s investment lies in its optimistic outlook for future market demand. In its statement, the company cited industry forecast data saying that between 2025 and 2030, the compound annual growth rate of the HBM market is expected to reach 33%. This explosive growth is mainly driven by the proliferation of artificial intelligence applications, making high-performance memory one of the most profitable segments in the semiconductor industry.

The new plant will focus on advanced packaging processes, which can combine multiple memory chips into a single high-density unit, significantly improving data processing speed and energy efficiency while reducing chip size. This technology route is crucial for meeting the stringent bandwidth and energy consumption requirements of the next generation of AI processors.

Supply Shortages and Price Pressure

Although the HBM market has great prospects, its production process is much more complex and demanding than that of traditional memory used in most consumer electronics. As chipmakers shift capacity toward high-end AI-driven demand, supply of traditional memory chips has already shown signs of tightening.

Research firm TrendForce released a report last week predicting that the average price of dynamic random-access memory (DRAM), including HBM, will increase by 50% to 55% this quarter compared to the fourth quarter of 2025. DRAM typically refers to the primary volatile memory used for temporary data storage in most computers. While higher memory prices present cost challenges for electronics manufacturers, they have also significantly boosted the profitability of memory chip producers. For example, Samsung Electronics said last week that it expects its operating profit in the December quarter to be nearly triple that of the same quarter last year.

After a strong performance in the Korean stock market in 2025, SK Hynix is currently evaluating a potential U.S. listing plan. Since the beginning of this year, the company’s stock price has risen about 12%, although it fell about 2.5% in Tuesday’s trading. As a key supplier to American tech giants like Nvidia, SK Hynix’s moves in the capital market are being closely watched by global investors.

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