SK Hynix (SKHY.US) plans to invest hundreds of trillions of won to build a factory in Japan, potentially setting a precedent for South Korean semiconductor investments in Japan.

According to reports from foreign media citing industry sources on Friday, SK Hynix (SKHY.US) is considering building a semiconductor storage chip production facility in Miyagi Prefecture, Japan, with a potential investment scale amounting to hundreds of trillions of Korean won. The report states that SK Group Chairman Choi Tae-won recently visited the area, which has been designated by the Japanese government as one of the semiconductor industrial clusters. This area, along with Kyushu and Hokkaido, has been identified as one of the three core semiconductor industrial bases by the Japanese government. According to informed sources, Chairman Choi Tae-won recently conducted an on-site inspection of the area. SK Hynix's move aims to expand production capacity in response to the continuing strong demand for global storage chips. Although the investment of hundreds of trillions of Korean won is significant, the production scale of the Miyagi plant is expected to be relatively small compared to SK Hynix's investments in the semiconductor industry clusters in Yongin, South Korea, and Hunan, which amount to hundreds of trillions of Korean won. Industry analysts believe that this plant will be positioned as a new overseas production base for SK Hynix, complementing its domestic industrial clusters in Korea. If the plan is ultimately realized, it will mark the first large-scale semiconductor manufacturing investment by a South Korean chipmaker in Japan. In response to the report, SK Hynix stated that no final decision has been made yet but indicated that "any site with the necessary infrastructure conditions could potentially be a candidate location." It is noteworthy that if this plan moves forward successfully, SK Hynix will become the third overseas company to operate a semiconductor manufacturing plant in Japan, following the United States' Micron Technology, Inc. and Taiwan's Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR. In contrast, South Korea's other major memory giant, Samsung Electronics, currently only has a next-generation semiconductor packaging research and development center in Yokohama, Japan.