South Korean memory chipmaker SK Hynix plans to invest US$3.86 billion to build a chip factory for a new dynamic random access memory (Dram) chip production base in South Korea, it said on Wednesday (Apr 24).

The Nvidia supplier plans to start construction at the chip factory, called M15X, at the end of April and aims to have it ready for mass production by November 2025.

Including a planned gradual increase in equipment investments, the total investment in the new production base is expected to be more than 20 trillion won (S$19.8 billion) in the long term, a company statement said.

SK Hynix cut annual investment by 50 per cent last year owing to a chip sector downturn and said in October that increases in 2024 would be kept to a minimum.

Despite the chipmaker’s stance on limiting investment, demand for its high bandwidth memory (HBM) chips used in graphic processing units (GPUs) to train artificial intelligence (AI) systems is so high that the company’s existing capacity is fully booked for this year and much of next year, it said.

SK Hynix said the new production base is aimed at increasing Dram capacity with a focus on HBMs.

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The world’s second-largest memory chip manufacturer forecast annual HBM market growth of more than 60 per cent, with demand for general Dram rising steadily, led by high-capacity chip products for servers.

SK Hynix plans to announce January-March quarter earnings on Thursday. REUTERS