Memory for AI SK Hynix Invests 12 Billion USD in New Packaging Plant in South Korea

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SK Hynix is building a new plant for advanced packaging and wafer testing in Cheongju. The investment, which is valued at just under 12 billion USD, is intended to increase HBM memory capacity and supplement the existing production structure in South Korea.

SK Hynix has started construction of the new P&T7 production facility in Cheongju. The company estimates the investment at 19 trillion won, the equivalent of around 12.9 billion US dollars or 10.9 billion euros. The facility is designed for advanced packaging and test processes for AI memory, in particular high bandwidth memory, or HBM for short.

The site is being built in the vicinity of the existing SK-Hynix plants M11, M12, M15 and M15X and will thus be integrated into an already established production structure. According to the company, commissioning is planned in stages: The WT line for wafer testing is scheduled for completion in October 2027, the WLP line for wafer-level packaging in February 2028.

Advanced Packaging As A Bottleneck Factor

In technical terms, P&T7 targets process steps that are increasingly crucial for modern AI memory. With wafer-level packaging, the packaging is already realized at wafer level before separation. This is intended to improve integration density, electrical properties and area efficiency. At HBM in particular, where several DRAM stacks interact closely with logic and interconnects, the backend thus becomes a key performance and quality factor.

The planned dimensions illustrate the importance of the project. Around 646,000 square feet of WLP space is planned on three levels and around 969,000 square feet for WT processes on seven levels. This results in a total cleanroom area of around 1.6 million square feet. The plant is therefore clearly designed for volume production in a segment that requires high process stability and tight tolerances.

The background to the investment is the continuing high demand for HBM for AI accelerators and data center applications. SK Hynix refers to market expectations according to which the HBM market could grow at an average annual rate of 33 percent between 2025 and 2030. At the same time, competitors are also expanding their capacities, which further increases the importance of available packaging and test resources.

Focus on HBM at the Expense of DRAM And NAND Capacities

On the one hand, additional expansion in the HBM environment strengthens the supply of high-performance memory for AI systems. On the other hand, shifting capacity to high-margin products ties up resources in a market that also requires conventional DRAM and NAND products. Several market observers therefore anticipate further increased price pressure for memory components.

In addition, advanced packaging is no longer just seen as a downstream production step. With increasing demands on bandwidth, energy efficiency, thermal behavior and signal integrity, the back-end process is increasingly becoming a differentiating feature. For OEMs, system developers and EMS providers, this means that availability, costs and technology roadmaps in packaging must be taken more into account in procurement and design decisions. (sg)

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