SK Hynix has authorised a combined investment of $38 billion for two new semiconductor factories in South Korea, underscoring its aggressive expansion plans amid persistent demand shortages that are not expected to ease until late 2028.
SK Hynix has authorised 54.3 trillion won, or about $38 billion, for two new factories in South Korea, a commitment that underlines how aggressively the chipmaker is planning for a market still constrained by demand. According to the company’s announcement, 35.2 trillion won will go to the Y2 plant in Yongin, which is designed for high-bandwidth memory and next-generation DRAM, while 19.1 trillion won will fund the M17 site in Cheongju for NAND flash production.
The most important detail is the pace of delivery. SK Hynix said M17 is due to break ground in February 2027, with its first cleanroom scheduled for December 2028. Y2 is not expected to start construction until July 2027, and its first cleanroom is not planned until June 2029. In semiconductor manufacturing, a cleanroom is only the first step; production tools still have to be installed and qualified before meaningful shipments can begin. That means the new capacity is years away.
The timing matters because SK Hynix is already struggling to keep up with demand. In its second-quarter results, reported last week, the company posted revenue of 79.3 trillion won and operating profit of 60.5 trillion won, both records, with an operating margin of 76%. The company also said it had begun mass shipments of HBM4 and finalised long-term agreements with around 10 key customers, but management still said demand was ahead of its supply capabilities.
Tom’s Hardware reported that SK Hynix has lifted its 2026 capital spending guidance to the high 40 trillion won range, and that it recently placed a record order with ASML for extreme ultraviolet lithography equipment to support advanced memory production. The company also plans a wider Yongin semiconductor cluster, which it has previously said could ultimately include four fabs over many years. Taken together, the projects suggest SK Hynix expects the current shortage in memory chips, especially for AI servers, to persist well into the next investment cycle.
That outlook helps explain why investors are watching the stock closely. Even after the latest run-up, analysts still see SK Hynix as trading on a relatively modest multiple, implying that the market expects the boom to fade sooner than the construction schedule suggests. Yet with neither of the newly approved fabs likely to contribute supply before late 2028 at the earliest, any meaningful easing in memory prices will have to come from existing plants, process gains or weaker demand elsewhere.
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