South Korea’s SK Hynix has announced a major investment of 19 trillion won, equivalent to about $12.90 billion, to build an advanced semiconductor packaging plant in South Korea as it moves to strengthen its position in the fast growing artificial intelligence memory market.
The company said construction of the new facility will begin in April, with completion targeted by the end of next year. The plant will focus on advanced chip packaging technologies that are critical for high performance memory products used in AI data centres, high end computing systems and next generation servers.
SK Hynix said intensifying global competition in artificial intelligence is driving a sharp increase in demand for AI focused memory solutions. This trend is especially evident in the rapid growth of high bandwidth memory, or HBM, which has become a core component in AI accelerators and graphics processing units.
HBM is a type of dynamic random access memory standard first introduced in 2013. Unlike conventional memory, HBM stacks multiple memory chips vertically and connects them using advanced interconnect technologies. This design significantly reduces power consumption while increasing data transfer speeds, making it ideal for processing the massive volumes of data generated by complex AI workloads.
As AI models grow larger and more computationally intensive, demand for HBM continues to surge. SK Hynix said the new advanced packaging plant will allow it to respond more proactively to customer requirements by expanding capacity and improving production efficiency for next generation HBM products.
The investment also reflects SK Hynix’s strategy to reinforce its leadership in the global HBM market. According to data from Macquarie Equity Research, SK Hynix was the top HBM supplier last year with a market share of 61 percent. Samsung Electronics followed with 19 percent, while US based Micron held a 20 percent share.
SK Hynix is currently the main HBM supplier to Nvidia, whose AI chips dominate the data centre accelerator market. As Nvidia and other AI chipmakers ramp up production to meet global demand, reliable access to advanced memory has become a strategic priority across the semiconductor industry.
Industry analysts say advanced chip packaging is increasingly important as traditional scaling approaches face physical and economic limits. By investing heavily in packaging capabilities alongside memory manufacturing, SK Hynix aims to enhance performance, reduce bottlenecks and maintain a competitive edge in AI focused semiconductors.
The new plant is expected to support South Korea’s broader ambition to remain a global semiconductor powerhouse, while helping SK Hynix capture long term growth opportunities tied to artificial intelligence, cloud computing and high performance computing markets.
SHAFANA FAZAL
