SK Hynix is investing $720 billion in what it says will become the world’s largest network of memory factories, betting that demand for AI chips will remain strong for years to come.
The South Korean memory giant, whose market value has climbed more than fivefold over the past year to above $1 trillion, is expanding production as AI companies compete for limited supplies of high-bandwidth memory (HBM).
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AI Drives A Memory Race
HBM is essential for AI processors because it enables rapid data access. SK Hynix held 58% of the global HBM market in the first quarter, ahead of Samsung and Micron, which each had 21%, according to Counterpoint Research.
Demand has pushed memory prices higher and encouraged major technology companies to secure supply through long-term agreements. SK Hynix signed 10 such deals in July, while Nvidia agreed to secure HBM supply and co-develop next-generation memory as part of a broader $500 billion deal with SK Group.
“It’s like a war,” said Chey Tae-won, chairman of SK Group, which controls SK Hynix. “Everybody wants to buy the memory chips.”
Nvidia CEO Jensen Huang has even sent SK Hynix a message on a wafer: “Please make more.”
Building A New Memory Hub
At the centre of SK Hynix’s expansion is the Yongin Cluster, where the company is building four fabs. The first will rise to roughly the height of a 50-story apartment building and feature six cleanrooms across multiple floors.
The company is also expanding its facilities in Cheongju, while South Korea is pursuing a broader plan to double national memory production over the next five years.
SK Hynix is not alone in the race. Micron is investing $50 billion in two fabs in Idaho and plans a potential $100 billion campus in New York. The Korean company is also building a $4 billion packaging facility in Indiana, scheduled for completion in 2028.
China Adds Pressure
Alongside the global race for capacity, SK Hynix faces growing competition from China. The company operates three fabs there but cannot sell its most advanced HBM products in the country because of U.S. export controls.
Chinese memory maker CXMT is expanding rapidly and recently made a high-profile debut on the Shanghai stock market. “It’s a race, and now the counterparty of the race is China,” Counterpoint Research director MS Hwang said.
For SK Hynix, the next stage of growth will increasingly depend on custom HBM designed specifically for AI processors. The company believes this shift could make memory less of a commodity and help protect its massive investment.
“Nvidia wants their own custom chips and Google wants their own customized HBM, so it’s not just a commodity,” Tae-won said. “It actually changes the memory chip’s status.”
