SK Hynix Invests Heavily with $12.9 Billion for Advanced Packaging Plant, Could Ease Memory Chip Shortage?

SK Hynix plans to invest 19 trillion won (approximately $12.9 billion) to construct a brand-new advanced chip packaging facility, initiating a major expansion drive aimed at meeting the surging demand from artificial intelligence (AI) applications. According to a statement from the South Korean chipmaker, the company will commence construction of this integrated facility in the southern city of Cheongju starting in April, targeting completion by the end of 2027. SK Hynix is the world's leading supplier of high-bandwidth memory (HBM), which is essential for Nvidia's AI accelerators. This substantial expenditure comes against a backdrop where a global tightening of memory chip supply is threatening investment in the AI sector. As data center construction accelerates, demand for HBM and other advanced memory chips is growing at a pace that has outstripped initial expectations. Memory chips—once considered commoditized components—have now become a bottleneck that directly limits the speed at which new AI accelerators can be deployed in data centers. Suppliers are seeking to increase the output of advanced chips, but due to lengthy validation cycles, complex packaging processes, and limited wafer capacity, the shortage is likely to persist, thereby maintaining firm prices and granting memory chip manufacturers unusually strong bargaining power with their customers. This imbalance is prompting major memory producers, including SK Hynix, Samsung Electronics, and Micron Technology, to reconsider their capital expansion plans and accelerate investments in advanced packaging lines. SK Hynix anticipates that the HBM market will grow at an average annual rate of 33% from 2025 through 2030. The company stated in its declaration, "The importance of proactively addressing the increasing demand for HBM is becoming ever more critical." SK Hynix's parent company, SK Group Chairman Chey Tae-won, had previously warned of supply tightness back in November. Delivering a keynote speech at the SK AI Summit in Seoul, he remarked, "We have entered an era where supply faces bottlenecks. We are receiving numerous supply requests for memory chips from many companies and are struggling to figure out how to meet all the demand."