Chipmaker SK Hynix plans to build a new 5.3 trillion won ($3.86 billion) dynamic random access memory (DRAM) chip fab in South Korea.

Set to be built near the company’s existing production base in Cheongju, construction at the new plant is scheduled to start at the end of April, with the company aiming for a November 2025 completion date.

SK Hynix Cheongju
SK Hynix, Cheongju, South Korea – SK Hynix

In a statement, the company said total investment at the new facility, known as M15X, is expected to exceed 20 trillion won ($14.5bn) in the long term.

Earlier this month, the memory chip manufacturer confirmed plans to invest $3.87bn to build an advanced chip packaging facility in West Lafayette, Indiana. That facility will produce next-generation high bandwidth memory (HBM), the highest-performing Dynamic Random Access Memory (DRAM) chips that can be used in GPUs to train AI models.

April also saw the company sign a memorandum of understanding with TSMC which will see the chip makers adopt TSMC’s foundry processes to develop HBM4, the sixth generation of HBM, which is expected to go into production in 2026.

Growing AI demand sees SK Hynix return to profitability

The new South Korean fab was announced in the same week that SK Hynix posted its Q1 2024 financial results, which saw it report a net profit of 1.92 trillion South Korean won ($1.39 billion). The results represent the first positive income recorded by the company since Q3 of 2022.

SK Hynix, which is the second most valuable company in South Korea, is the primary supplier of HBM (high bandwidth memory chips) to Nvidia for the chip designers’ GPUs and is the sole supplier of HBM3 to the company.

In a statement, the company said that the demand for AI memory technology in addition to increased sales of enterprise solid state drives (eSSD) for use in on-premises AI data centers is helping to boost the company’s DRAM and NAND businesses and allowing it to achieve “meaningful turnaround” with regards to its profits.

“With the industry’s best technology in the AI memory space led by HBM, we have entered a clear recovery phase,” CFO Kim Woohyun said. “We will continue to work towards improving our financial results by providing the industry’s best-performing products at the right time and maintaining the profitability-first commitment.”