SK hynix expands AI chip capacity with new $14 billion plant in Cheongju

SEOUL, January 13 (AJP) - SK hynix will invest about 19 trillion won ($14 billion) to build a new advanced semiconductor packaging plant in Cheongju, North Chungcheong Province, in a move to meet surging global demand for high-bandwidth memory.

The South Korean chipmaker said Tuesday that the investment will bolster its next-generation memory competitiveness, particularly in HBM, a critical component for AI data centers, while aligning with the government’s push for more balanced regional development.

In a statement posted on its newsroom website, SK hynix said it selected Cheongju after reviewing multiple locations, citing the importance of close links between front-end chipmaking and back-end packaging and testing. Accessibility, logistics efficiency and operational stability were key considerations, the company said.

The new facility, known as P&T7, will handle the packaging and testing of chips produced in front-end fabs, completing them as final products.

While front-end processes form circuits on silicon wafers, back-end operations cut, package and verify the chips. Advanced packaging has taken on growing importance as it directly affects performance and power efficiency in AI-focused memory products such as HBM.

With the project, SK hynix will operate advanced packaging bases in three locations: Icheon and Cheongju in South Korea, and West Lafayette, Indiana. The P&T7 plant will be built on a 230,000-square-meter site within the Cheongju Technopolis industrial complex. Construction is scheduled to begin in April, with completion targeted for the end of 2027.

The company said the Cheongju campus will form an integrated semiconductor cluster spanning NAND flash and DRAM production through advanced packaging.

SK hynix already operates several NAND fabs in the area, including M11, M12 and M15, along with a back-end facility, P&T3. It is also building its next-generation DRAM line, M15X, following a separate 20 trillion won investment decision last year.

SK hynix said M15X opened its cleanroom ahead of schedule in October and is currently installing equipment as it prepares for early operations. The company plans to link front-end and back-end production more tightly, with P&T7 expected to play a central role in converting DRAM produced at M15X into HBM.

Market researchers forecast the global HBM market will expand at an annual rate of more than 30 percent through 2030, driven by intensifying competition among technology companies to scale AI computing infrastructure.

SK hynix also framed the investment as part of a broader effort to strengthen South Korea’s industrial base amid ongoing debate over the concentration of corporate investment in the Seoul metropolitan area.

“The Cheongju P&T7 investment reflects a decision to build a foundation for competitiveness across the industrial ecosystem and regional coexistence, beyond short-term cost considerations,” the company said.