SK Hynix to Build $51 Billion NAND Chip Factory

SK Hynix, the South Korean chipmaker known for supplying high bandwidth memory to Nvidia and other AI hardware makers, said on Thursday it will spend 80 trillion won ($51.46 billion) building a new NAND memory plant, betting that demand tied to the AI boom will keep outrunning supply through the rest of the decade.

The announcement came at an event in Cheongju attended by CEO Kwak Noh-jung and South Korean President Lee Jae Myung, underscoring how central the memory chip sector has become to national industrial policy. Construction on the new facility, named M17, is set to begin next year in the same city, with the plant aimed squarely at closing a NAND supply gap that has widened as AI servers and storage systems consume ever larger volumes of memory.

80 Trillion Won and a Second Cheongju Project

Beyond the M17 fab, SK Hynix plans to commit another 20 trillion won to a separate chip packaging facility, also in Cheongju, with completion targeted for late 2027. Packaging has become a bottleneck of its own in advanced memory production, since stacking and connecting chips efficiently is what allows high bandwidth memory to hit the speed and capacity that AI accelerators demand. Together, the two projects total roughly 100 trillion won in committed spending, a figure that signals how seriously the company views the current AI driven upswing as a multi year trend rather than a short term spike.

Why NAND Supply Has Tightened

NAND flash, unlike the high bandwidth memory that has driven much of SK Hynix's recent earnings strength, is used broadly across data center storage, enterprise servers and consumer devices. The AI buildout has pulled NAND into the same demand surge that has already strained DRAM and HBM output, and chipmakers have been slow to add new capacity after years of oversupply and weak pricing depressed investment. SK Hynix's decision to build M17 with a 2029 target suggests the company expects that tightness to persist well beyond the current AI infrastructure spending cycle led by hyperscalers and cloud providers.

South Korea's Stake in the Buildout

President Lee's attendance at Thursday's event points to how much weight Seoul places on keeping memory chip production, and the jobs and export revenue that come with it, anchored inside the country as global competitors in the United States, Japan and China chase the same AI related demand. Cheongju, already home to SK Hynix manufacturing operations, is set to absorb both the new NAND fab and the packaging plant, concentrating a large share of the company's near term expansion in one South Korean industrial hub rather than spreading it across overseas sites.

The scale of the investment, at the exchange rate cited by the company of 1,554.6 won to the dollar, also reflects how much capital South Korea's chip industry is now redirecting toward AI infrastructure, even as questions remain about how long the current pace of AI hardware spending can be sustained once early stage buildouts by major cloud and AI companies mature.