SK Hynix completes construction of its largest $3.14 bn chip plant

SK Hynix Inc. has completed the construction of its largest chip plant, which will use cutting-edge technology to produce memory semiconductors to meet growing post-pandemic demand for chips used in electronic devices.

SK Hynix, the world’s second-largest DRAM maker, said on Feb. 1 that the M16 chip fabrication plant, located at its main production base in Icheon, south of Seoul, will begin mass production in July at the earliest.

The company invested a total of 3.5 trillion won ($3.14 billion) in the plant, the construction of which began in November 2018. Occupying a 57,000 square-meter parcel of land, the factory is the company’s single-largest production facility among its chip plants in Korea and abroad.

“It was worrying when we decided to build the M16 two years ago, as the overall semiconductor memory market was in a downturn,” SK Group Chairman Chey Tae-won said at a ceremony at the plant.

“However, as the industry anticipates upcoming positive market conditions, it seems that our bold decision in the past will lead us to a better future.”

In 2014, SK Hynix pledged that it would build three new fab facilities, including the M16, within a decade.

CUTTING-EDGE EUV TECH FOR DRAM CHIPS AT M16 PLANT

The company said on Monday that for the first time it has brought in extreme ultraviolet (EUV) lithography equipment to its latest plant, allowing it to produce chips with finer circuit patterns.

It plans to manufacture fourth-generation 10-nanometer DRAM chips using the EVU equipment at the factory from the second half of the year.

“M16 will become a production plant of a higher level, contributing to ESG (environment, social and governance) management as well as creating economic value,” Chief Executive Lee Seok-hee said in a statement.

As the semiconductor industry is widely expected to enter the next phase of a V-shaped recovery following the pandemic-caused economic slowdown, chipmakers, including SK Hynix, have been ramping up production facilities in anticipation of growing demand.

Last week, the company said its operating profits quadrupled to 966 billion won in the fourth quarter of 2020 from a year earlier, boosted by robust chip demand for mobile gadgets. Fourth-quarter sales rose 15% on the year at 7.97 trillion won, it said.

The company said it expects the DRAM chip market for server products, which account for about 40% of the global DRAM sales, to grow more than 30% this year, while chip demand for mobile devices will likely increase over 20%.

In October last year, it said it was acquiring Intel Corp.’s NAND memory chip business for $9 billion, a deal that is expected to secure the company's position as the world’s second-largest player in the NAND market.

Write to Jeong-Soo Hwang at hjs@hankyung.com
In-Soo Nam edited this article.