SK hynix Announces Major Investments in Yongin and Cheongju Semiconductor Fabs to Meet AI-Driven Memory Demand
SK hynix Inc. has unveiled plans to construct new semiconductor fabrication plants in Yongin and Cheongju, South Korea, in response to the rapidly increasing global demand for memory solutions in the era of artificial intelligence. The company’s board has approved a total investment of approximately 54 trillion won, allocating 35.2 trillion won for the Yongin “Y2” fab and 19.1 trillion won for the Cheongju “M17” fab.
Strategic Expansion to Support AI Memory Growth
This investment is part of SK hynix’s broader mid-to-long-term strategy, first announced in June, which includes a master plan to invest 600 trillion won in the Yongin Semiconductor Cluster and 100 trillion won to expand its Cheongju production base. The company is already constructing its first Yongin fab (Y1), and with this latest decision, it is moving forward with subsequent fabs in both Yongin and Cheongju.
According to market research firm Omdia, demand for both DRAM and NAND memory is expected to maintain a compound annual growth rate (CAGR) of 19% through 2030. SK hynix views this surge not as a temporary cycle, but as a fundamental shift where memory becomes a core infrastructure element that directly impacts AI performance.
SK hynix emphasized that in the AI era, technological leadership must be matched by the ability to deliver memory products precisely when customers need them. The company’s investment decision follows a comprehensive review of market trends and customer requirements.
Details of the Yongin and Cheongju Fab Projects
The Yongin Y2 fab is the second of four planned facilities within the Yongin Semiconductor Cluster. Designed as a DRAM production hub, Y2 will cover a total floor area of 341,000 pyeong (approximately 1,130,000 square meters). Construction is set to begin in July next year, with the first cleanroom scheduled to open in June 2029 for the production of high-bandwidth memory (HBM) and next-generation DRAM products. The Y1 fab, currently under construction, is on track to open its initial cleanroom in February next year.
SK hynix has accelerated its timeline for the Yongin Semiconductor Cluster, aiming to complete all four fabs by 2033—12 years ahead of the original 2045 target. The Y2 project represents the second phase of this expedited schedule, with investments planned through October 2031. The budget also covers the construction of a business support building, an integrated R&D center, and supporting infrastructure for Y2 personnel.
The Yongin Semiconductor Cluster spans approximately 1.26 million pyeong (about 4,160,000 square meters) in Wonsam-myeon, Cheoin-gu, Yongin-si, Gyeonggi-do. Phase 1 power and water infrastructure, essential for Y2 operations, is nearly complete at a 99% progress rate. SK hynix is coordinating fab construction and infrastructure development to ensure the Y2 project remains on schedule.
Cheongju: A Strategic Base for NAND Production
In the NAND market, demand is surging, particularly for enterprise SSDs driven by the expansion of AI services. This growth is further fueled by the increasing need for key-value (KV) cache-to-storage in AI inference, with applications expected to broaden as Agentic and Physical AI technologies emerge.
Cheongju was selected as the site for the new NAND fab due to its ability to support the fastest construction timeline. The Cheongju Campus already hosts the M11, M12, and M15 fabs, allowing for efficient integration with existing operations and leveraging established power and water infrastructure. The new M17 fab will occupy 206,000 pyeong (approximately 680,000 square meters), with construction beginning in February next year and the first cleanroom set to open in December 2028. The investment period extends through April 2031.
Aligning Production with Market Demand
SK hynix is committed to proactively securing production infrastructure based on mid-to-long-term demand forecasts developed in collaboration with customers. The company will expand actual production capacity in line with customer needs, constructing fabs according to the master schedule while phasing cleanroom expansions and equipment installations to maximize capital efficiency.
Strengthening the Semiconductor Ecosystem and Local Economies
This large-scale investment is expected to lay the foundation for SK hynix’s future growth, enhance the competitiveness of South Korea’s semiconductor industry, and stimulate local economies. The simultaneous development of fabs in Yongin and Cheongju is anticipated to create new opportunities for supply chain partners, generate employment, and revitalize local commercial districts, contributing to the sustainable growth of the national economy.
An SK hynix representative stated, “This investment is a strategic move to keep pace with the market’s rapid growth. By proactively expanding our production capabilities, we aim to become a key partner in AI infrastructure and support the stability of the global AI semiconductor supply chain.”
