Amid surge in AI memory demand, SK Hynix to invest $13 billion in new chip packaging facility

South Korea's top chip manufacturer SK Hynix has announced plans to invest $12.9 billion (roughly 19 trillion Korean won) in a new advanced chip packaging facility. This comes as part of a strategic plan to address a global memory chip shortage resulting from the rising demand for artificial intelligence (AI) applications.

The statement, released on Tuesday, highlights the increasing competition in the AI memory market and reflects industry attempts to ease supply limitations that pose a threat to the expansion of technology.

SK Hynix already has several production locations in Cheongju, South Korea, where the new factory is scheduled to start construction in April. The project is expected to be completed by the end of 2027, with the design and build stages starting in the upcoming months, according to company spokespersons.

This timetable aims to align with the projected increase in demand for high-performance memory technologie

s, which are crucial for computer systems of the future.

The investment by SK Hynix comes with a shortage of memory chips worldwide, particularly high-bandwidth memory (HBM). It is a kind of Dynamic Random Access Memory, or DRAM, intended for fast data processing in data centres and artificial intelligence systems.

HBM chips are essential for advanced AI accelerators because they stack memory cells vertically to save power and space while increasing speed.

The HBM market is expected to develop at a compound annual growth rate of 33% between 2025 and 2030, according to industry forecasts referenced by SK Hynix.

After a successful 2025 for its shares in South Korea, SK Hynix is considering a possible US offering. Despite a 2.5% decline on Tuesday, the stock had increased by nearly 12% since the beginning of this year.

Furthermore, SK Hynix accounted for over 61% of the worldwide HBM market last year, far surpassing rivals like Samsung Electronics and Micron, which owned about 19% and 20%, respectively. SK Hynix's HBM products continue to be a major client of Nvidia, a prominent AI chip provider.

Taipei-based tech research firm TrendForce projected that the average dynamic random access memory costs, including HBM, would increase by 50% to 55% this quarter compared to the fourth quarter of 2025.

The process of merging raw semiconductor dies into completed modules, or packaging, has become an obstacle in the semiconductor supply chain, according to industry experts. Therefore, increasing advanced packaging capacity is crucial regardless of the significant expenditure.

SK Hynix highlighted in its statement the strategic significance of the new facility in preserving leadership in AI memory technologies and guaranteeing supply resilience.

The investment is also expected to support South Korea's larger semiconductor ecosystem by boosting downstream capabilities in the area and generating employment.