SK Hynix to invest $13 billion in new plant amid memory chip shortage

South Korea-based representation shaper SK Hynix announced Tuesday it volition put 19 trillion Korean won ($12.9 billion) to physique a caller precocious packaging plant, arsenic it expands accumulation to conscionable rising demands tied to artificial intelligence. 

The caller installation volition beryllium located successful the Korean metropolis of Cheongju, gathering connected the company's existing footprint there. Construction is acceptable to statesman successful April, with completion targeted for the extremity of 2027, the steadfast said successful a statement.

The works volition absorption connected precocious packaging, which involves combining aggregate representation chips into a single, high-density portion to amended show and vigor ratio portion reducing wide size.

SK Hynix is among the world's largest producers of representation chips and leads successful alleged high-bandwidth representation (HBM), which is utilized successful artificial quality processors, including those designed by U.S. chipmaker Nvidia. 

The concern comes arsenic SK Hynix seeks to conscionable increasing request for HBM arsenic planetary AI contention intensifies, a inclination that has pushed up prices and made it lucrative for representation giants.

SK Hynix rival Samsung Electronics has besides announced plans to ramp up HBM accumulation successful caller months.

According to manufacture projections cited by SK Hynix, the HBM marketplace is expected to grow astatine a compound yearly maturation complaint of 33% betwixt 2025 and 2030.

However, arsenic producers displacement to conscionable this AI-oriented demand, it has besides led to shortages successful accepted memory, raising concerns astir terms hikes crossed the broader electronics industry.

SK Hynix shares are up astir 12% year-to-date, but were down 2.5% successful Tuesday trading.