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Key Takeaways
- SK Hynix is spending $6.8 billion on a semiconductor manufacturing plant in South Korea to keep up with surging demand for artificial intelligence chips.
- The company manufactures memory chips that are used by tech heavyweights like Nvidia and others in the AI industry.
- The plant will be the first of four SK Hynix manufacturing plants planned for a site in South Korea.
- The announcement also comes amid a push by the South Korean government to support the country’s position in the growing chip market.
Nvidia (NVDA) supplier SK Hynix said it plans to spend 9.4 trillion Korean won ($6.78 billion) on a semiconductor manufacturing plant in South Korea to keep up with surging demand for artificial intelligence (AI) chips.
The company, which makes memory chips for some of the world’s biggest AI heavyweights, is one of several South Korean companies planning to build fabrication plants at a site called the “Yongin Semiconductor Cluster” over the next several years, amid a push by the South Korean government to support the country’s position in the growing chip market.
First of 4 SK Hynix Fabs To Start Construction Next Year
“The company will make every effort to build the fab to lay the foundation for the company’s future growth and respond to the rapidly increasing demand for AI memory semiconductors,” SK Hynix said in a release. The plant is set to start construction next year, for completion by May 2027.
After the first is completed, the company also plans to build another three fabs to support a semiconductor cooperation complex, where SK Hynix said it will work with over 50 small Korean tech companies.
“The Yongin Cluster will be the foundation for SK Hynix’s mid- to long-term growth and a place for innovation and co-prosperity that we are creating with our partners,” SK Hynix Head of manufacturing technology Kim Young-sik said.
Shares of U.S.-listed semiconductor companies including SK Hynix customer Nvidia gained in early trading Friday, rebounding from recent losses as investors rotated into small-cap stocks expected to benefit from Federal Reserve rate cuts.