SK Hynix bets $38 billion on AI memory demand

SK Hynix is committing 54 trillion Korean won ($38.1 billion) to two new memory-chip factories in South Korea, betting that demand from AI data centers will remain strong enough to justify one of the company’s largest manufacturing expansions.

The investment follows an AI-driven surge in demand for high-bandwidth memory (HBM), DRAM and NAND storage. SK Hynix is the second-largest DRAM and NAND manufacturer after Samsung, and the new facilities are intended to help it increase supply as data-center operators absorb more of the industry’s output.

Yongin and Cheongju fabs

The larger project is a 35.2 trillion won ($24.9 billion) fabrication plant in Yongin. It will produce HBM and other DRAM products used in AI systems. SK Hynix will spend a further 19.1 trillion won ($13.2 billion) on a NAND facility in Cheongju.

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The company said the first cleanroom could begin production as early as June 2029. It did not provide detailed production-capacity figures, a full construction schedule or a product-by-product breakdown of the output.

“This investment is a decision made to seize opportunities in line with the market’s growth speed… we reached this investment decision after a thorough review of market demand.”

The announcement extends the capacity push covered in our report on companies offering to fund SK Hynix DRAM expansion, while Samsung is also expanding its own memory footprint, including a reported $1.5 billion DRAM and NAND testing plant in Vietnam.

Prices may stay high through 2028

The timing matters for consumers. Memory manufacturers are directing much of their production toward data-center customers, where AI-related demand and pricing are stronger. Engadget additionally noted that Micron has abandoned the consumer-memory market to focus exclusively on AI products.

That shift has already contributed to higher prices for smartphones, PCs and consoles. Counterpoint Research analyst Neil Shah told CNBC that memory prices are unlikely to soften before the end of 2028, because demand is growing faster than planned capacity.

SK Hynix’s expansion is therefore substantial in scale but not an immediate solution. Even if the Yongin and Cheongju fabs meet their schedule, the first production is still years away, and the company’s plan depends on AI memory demand remaining strong despite growing concerns that the boom could weaken. Based on the reported timeline, the investment supports long-term supply rather than near-term price relief.