South Korean semiconductor manufacturer SK Hynix has announced plans to invest 19 trillion won, equivalent to around £10.5 billion, in a new advanced chip packaging facility as it moves to strengthen its position in the fast-growing artificial intelligence memory market.
The new plant, to be built in the city of Cheongju, will focus on advanced packaging and testing processes, which are the final stages of semiconductor production before chips are shipped to customers. Construction is expected to begin in April, with completion targeted for the end of 2027.
The investment reflects surging global demand for high-bandwidth memory (HBM) chips, a key component used in AI servers and high-performance computing systems. HBM chips stack multiple layers of memory vertically, allowing faster data processing while reducing power consumption. These chips are essential for handling the heavy workloads generated by artificial intelligence models.
SK Hynix is currently one of the world’s leading suppliers of HBM and a major partner of US chip designer Nvidia, which dominates the market for AI processors. The company held the largest share of the global HBM market last year, according to industry estimates, and has been racing to expand capacity to keep pace with customer demand.
The Cheongju facility, known internally as P&T7, will be built within an existing semiconductor cluster where SK Hynix already operates several memory production lines. By expanding its back-end packaging capabilities alongside front-end manufacturing, the company aims to improve efficiency, shorten production times and ensure a more stable supply chain.
Advanced packaging has become increasingly important as chipmakers seek to boost performance without relying solely on shrinking transistor sizes. For AI applications in particular, packaging technology plays a critical role in connecting memory and processors at high speed.
The investment comes amid intensifying global competition in the semiconductor industry, with governments and companies alike pouring money into chip production to secure supply and technological leadership. South Korea has identified semiconductors as a strategic industry and continues to support large-scale investments by its leading chipmakers.
SK Hynix said the new plant would help it respond more flexibly to customer needs while reinforcing its long-term growth strategy in AI-related memory products, as demand for artificial intelligence hardware continues to expand worldwide.
Author: Kieran Seymour