The memory chip industry is notorious for its boom-and-bust cycles, but SK hynix is defying the odds by launching the world's largest memory fab expansion, investing a staggering $720 billion to boost capacity. As the first media outlet granted exclusive access to film the Yongin cluster, the site's first factory is set to begin production next February. South Korea's president is urging SK hynix and its top rival, Samsung, to rapidly expand memory production, backed by a national industrial plan that includes at least $22 billion in chip support.
SK hynix made headlines in July by listing on the Nasdaq, achieving the largest IPO by a foreign company in the U.S. market. South Korea's mountainous terrain makes large-scale infrastructure projects exceptionally challenging, but the world's leading high-bandwidth memory (HBM) maker is undeterred. It plans to invest $720 billion to create what is touted as the largest memory chip factory complex globally. Over the past year, SK hynix's market value has surged more than fivefold, surpassing $1 trillion. The company is betting heavily that the insatiable demand driven by artificial intelligence is a long-term trend, as capacity shortages push chip prices higher, rewriting the traditional “boom-bust” pattern of the memory industry. AI chip giants like Nvidia are taking on higher risks to secure stable supply, with market research firm Counterpoint showing SK hynix held a 58% share of the HBM market in the first quarter, while Korean rival Samsung and U.S. firm Micron each held 21%.
To fund this massive expansion, SK hynix, primarily listed on the Korea Exchange, raised $26.5 billion in its July Nasdaq debut, setting a new record for a foreign company's U.S. listing. However, for new U.S. investors, the stock has faced pressure recently, falling about 21% from its July 14 high near $195 to close at $154.41 on Wednesday. This pullback coincides with broad volatility in the AI sector and a decline in chip stocks, while SK hynix and Samsung together account for nearly half of the South Korean stock market's value. Despite these fluctuations, SK hynix is pushing forward with its historic expansion.
In June, South Korean President Lee Jae-myung unveiled a national industrial blueprint aiming to double the country's memory chip production capacity within five years, including the construction of multiple mega-fabs by Samsung. On July 21, 2026, in Yongin, South Korea, SK hynix HBM design head Park Myung-jae guided a tour of the under-construction Yongin cluster, which was granted exclusive media access. The visit also included a look at the Cheongju memory cleanroom, where massive infrastructure work is ongoing. “The situation is like a battle,” said SK Group Chairman Chey Tae-won in a Seoul interview. “All companies are scrambling to buy memory chips; without them, they can't produce AI computing equipment or chips.” Chey acknowledged that “chip prices are rising too fast, and I hope this large-scale expansion can improve supply and demand. We are putting all our efforts into building capacity.”
A key difference between U.S. chip plants and SK hynix's three major complexes is building height. The first fab at the Yongin cluster, with its main structure half-complete, stands as tall as a 50-story residential building. It will house six interconnected cleanrooms across multiple floors, contrasting with the single-level, horizontal layouts of TSMC and Intel's new Arizona factories. HBM, made by stacking standard DRAM, offers ultra-high bandwidth for rapid data retrieval to power AI processors, but mass production consumes enormous DRAM capacity, squeezing supply for consumer electronics. AI giants are now signing multi-year, long-term supply contracts, breaking the industry's traditional model of low-margin, short-term orders. SK hynix disclosed in July that it has signed ten long-term supply agreements with key customers. Nvidia has partnered with SK Group in a $500 billion deal to secure stable HBM supply, co-develop next-generation memory, and plan to build new data centers with SK Telecom by 2027. Chey Tae-won showed a wafer with a message from Nvidia CEO Jensen Huang: “Please produce more chips.” He noted regular meetings with tech titans like Microsoft's Satya Nadella, Google's Sundar Pichai, and Meta's Mark Zuckerberg, while Huang and AMD CEO Lisa Su have recently visited South Korea to discuss memory chip collaboration. Counterpoint Research Director Hwang Min-soo noted that hotels near SK hynix and Samsung memory fabs are fully booked, with “almost all big tech executives heading to South Korea to negotiate supply contracts.”
SK hynix operates three memory fabs in China but is barred by U.S. export controls from selling advanced HBM products there. China's domestic high-end memory industry for AI is rising, with Changxin Memory recently debuting on the Shanghai stock market to a hot reception. “This is a race, and our competitor is now China,” Hwang said. “The risk in this competition is far greater than any other global race.” South Korean President Lee is urging local fabs to accelerate construction, even as the U.S. races to expand its own chip capacity. The first of four fabs in SK hynix's giant Yongin cluster is taking shape in a global sprint to build bigger, stronger memory capacity. Micron plans to invest $50 billion in two large memory fabs in Boise, Idaho, with the first expected to start wafer production in 2027, and $100 billion for a campus in Clay, New York, with up to four fabs. SK hynix is also planning its first U.S. factory, a $4 billion advanced packaging facility in West Lafayette, Indiana, set to be completed by 2028, focusing on chip stacking and interconnection rather than front-end wafer manufacturing. Apart from the Indiana project, all of SK hynix's overseas capacity is currently in China.
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