SK Hynix splashes out $12.9 billion to build an advanced packaging factory. Could this help alleviate the shortage of storage chips?

SK Hynix plans to invest 19 trillion Korean won (approximately $12.9 billion) to build a new advanced chip packaging factory, kicking off a large-scale expansion aimed at meeting the surging demand for artificial intelligence (AI) applications. According to the South Korean chip manufacturer's statement, the company will start construction of this integrated facility in the southern city of Cheongju in April, with the goal of completing it by the end of 2027. SK Hynix is the leading global supplier of High Bandwidth Memory (HBM) required for NVIDIA's AI accelerators. The background of this spending is the global shortage of memory chips that is threatening investments in the AI sector. As data center construction accelerates, the demand for HBM and other advanced memory chips has grown faster than expected. Memory chips, once seen as commoditized components, have now become bottlenecks directly limiting the deployment speed of new AI accelerators in data centers. Suppliers are seeking to increase production of advanced chips, but due to long validation cycles, complex packaging processes, and limited wafer capacity, this means that shortages may persist, maintaining strong prices and giving memory chip manufacturers unusual bargaining power when dealing with customers. This imbalance is prompting major memory manufacturers such as SK Hynix, Samsung Electronics, and Micron Technology to reconsider their capital expansion plans and accelerate investments in advanced packaging lines. SK Hynix expects the HBM market to grow at an average annual rate of 33% from 2025 to 2030. The company stated, "Addressing the growing demand for HBM is becoming increasingly critical." SK Group Chairman Chey Tae-won warned of tight supply last November. In a keynote speech at the SK AI Summit in Seoul, he said, "We are entering an era where supply is facing bottlenecks. We have received many requests for memory chip supply, and we are contemplating how to meet all the demands."