South Korean semiconductor giant SK Hynix has announced a massive investment of approximately 19 trillion won ($12.9 billion) to construct a new advanced chip packaging plant in Cheongju, North Chungcheong Province. The groundbreaking for the facility is scheduled for April, with completion targeted by the end of 2027.
The primary driver for this investment is the explosive demand for High-Bandwidth Memory (HBM) driven by artificial intelligence. The company cited projections showing the HBM market growing at a compound annual growth rate of 33% between 2025 and 2030. The new plant, designated P&T7, will specialize in advanced packaging technology, which combines multiple memory chips into high-density units to enhance performance and energy efficiency for AI applications.
SK Hynix currently dominates the HBM market with a 61% share, leading competitors Samsung Electronics (19%) and Micron (20%). The Cheongju campus already houses major fabrication plants (M11, M12, M15) and the P&T3 packaging facility. The new P&T7 plant is expected to create strong operational synergy with the nearby M15X fab, which is set to begin mass production in February. Once operational, Cheongju will support the full production stages for NAND flash, DRAM, and HBM.
The strategic shift towards AI memory is already impacting the broader market. Research firm TrendForce projects that average DRAM prices, including HBM, will surge 50-55% in the current quarter compared to Q4 2025, due to supply constraints as manufacturers prioritize AI-focused memory. This price pressure boosts earnings for memory producers; Samsung recently forecast that its operating profit for the December quarter would nearly triple year-over-year.
The investment is also framed as part of South Korea's economic balancing plans, aiming to spread growth outside major metropolitan areas. SK Hynix stated the investment aims to "strengthen the nation’s industrial base and help build a structure in which the capital region and local areas grow together."
The announcement follows intense competition in the sector. Rival Samsung Electronics is also aggressively expanding its HBM production capacity, planning a roughly 50% increase in 2026 to meet demand from top client Nvidia. Samsung has also announced a separate $41.5 billion investment in its P5 facility in Pyeongtaek, set to begin operations in 2028. Recent reports indicate Samsung's sixth-generation HBM (HBM4) outperformed SK Hynix and Micron in Nvidia's internal tests for use in upcoming Rubin processors.
