SK Hynix, a leading memory chipmaker and key supplier to Nvidia, has unveiled plans for a massive $13 billion (approximately 19 trillion won) investment in a new advanced packaging fabrication plant in South Korea. The facility, named P&T7, will be located in Cheongju's Heungdeok district and is dedicated to producing high-bandwidth memory (HBM) chips, which are critical components for AI data centers and accelerators like those from Nvidia.
Construction on the plant is set to begin in April 2026, marking one of the company's largest single-facility commitments. The investment underscores the intense demand for HBM, a type of memory where stacked dies are connected through vertical channels for high-speed data transfer essential for AI workloads. SK Hynix noted that customer requests for HBM already exceed its production capacity for the next three years, creating a significant supply bottleneck.
The announcement follows closely on the heels of SK Hynix beginning mass production of a next-generation memory module designed specifically for Nvidia's upcoming Vera Rubin AI chip platform. This rapid sequence of events highlights the company's aggressive push to secure its position in the AI supply chain.
Despite this strategic expansion, SK Hynix's stock experienced a muted reaction to its record-breaking first-quarter financial results. The company reported an operating profit of 37.6 trillion won ($25.4 billion) for January-March, a more than fivefold increase year-over-year, on revenue of 52.6 trillion won. However, shares fell around 2.1% following the earnings release.
Analysts attribute the subdued market response to sky-high investor expectations, as the stock had already surged nearly 90% year-to-date before the announcement. The core debate has shifted from current demand strength to its long-term durability. Chairman Chey Tae-won has warned that the wider semiconductor wafer shortage could persist until 2030 due to AI demand outpacing supply.
To address capacity constraints, SK Hynix plans to increase capital spending beyond last year's 30.2 trillion won. This includes not only the new P&T7 plant but also purchases of advanced EUV lithography tools from ASML. The company acknowledges that translating this new capacity into sales will involve a significant time lag.
