By Kwanwoo Jun
SK Hynix, a major supplier of high-bandwidth-memory products to Nvidia, plans to build a $13 billion chip packaging plant in South Korea amid surging demand for artificial-intelligence chips.
The South Korean memory-chip maker said Tuesday it will spend 19 trillion won to build an advanced facility for packaging and testing AI chips in Cheongju, south of Seoul.
The new plant, due to be completed by the end of 2027 with construction set to start in April, will add to SK Hynix's chip-packaging capacity in South Korea. The company is also building facilities in the U.S.
SK Hynix "is proactively responding to rising HBM demand" amid surging AI memory demand, according to a statement released by the company. The HBM market is expected to grow 33% annually on average from 2025 to 2030, it said.
HSBC analyst Ricky Seo said in a research note on Tuesday that SK Hynix would continue to benefit from what he calls "a memory supercycle" that could last for four to five years. The upbeat outlook is underpinned by solid HBM shipments supported by robust AI investments, as well as strong demand for conventional commodity dynamic random-access memory chips, he said.
The chip maker is set to post record fourth-quarter earnings, Seo said. Its operating profit in the October-December period is expected to have surged 57% from the previous quarter to a record 18 trillion won, with its DRAM and NAND chip prices likely having risen 25% and 20%, respectively, he said.
The South Korean won's weakness against the U.S. dollar also likely helped boost SK Hynix's quarterly earnings, Seo added. The company is expected to disclose its results later this month.
Shares in SK Hynix were down 1.6% in Tuesday afternoon trading on profit taking following recent gains. Nonetheless, the stock is up around 13% so far this year.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
01-13-26 0122ET
