(Bloomberg) — SK Hynix Inc. plans to spend about $14.6 billion on building a new memory chip complex in South Korea, preparing to meet growing demand for semiconductors used in developing AI .
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The Korean company aims to set aside an initial 5.3 trillion won to begin building a new factory in late April, with completion scheduled for November 2025. Total investment in the site will exceed 20 trillion won as SK Hynix equips it with equipment. in the long term, it said in a statement.
The anticipated outlay underscores a global race to provide the essential hardware and components to create generative AI services around the world. SK Hynix, which reports quarterly results on Thursday, is the current leader in a type of advanced chip called high-bandwidth memory, tailored for AI.
It is struggling to sustain that advantage. SK Hynix, for now, is outpacing competition from Samsung Electronics Co. in supplying so-called HBM chips, which work well with accelerators designed by Nvidia Corp. Samsung, however, has promised to focus its formidable resources on upgrading high-end memory.
Read more: SK Hynix plans to spend $4 billion on first US chip factory
SK Hynix in December became South Korea’s second most valuable company and its shares have risen another 27% this year as investors bet that AI and a recovery in IT spending will catapult the market out. of a recession that has lasted for years. This week, industry leader Texas Instruments Inc. released an upbeat revenue forecast.
The Korean company is expanding ahead of the expected recovery. Demand for HBM is predicted to grow 60% annually over the next few years, even as regular DRAM sales increase along with the proliferation of data centers.
It plans to locate its newest factory close to its existing production base in Cheongju. The company is also expanding in the U.S., with plans to spend $3.9 billion on an advanced packaging factory and a research center for artificial intelligence products in Indiana.
Separately, SK Hynix is proceeding with other domestic investments, including in the Yongin Semiconductor Cluster, where it will inject about 120 trillion won over the long term. The company plans to start construction of the first factory in Yongin in March 2025 and complete it by May 2027. Since 2014, SK Hynix has invested 46 trillion won to build three new factories in the country.
(Updates with details from second paragraph statement)
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