SK Hynix Board Approves $38 Billion Investment to Build Two New Memory Fabs

South Korean semiconductor giant SK Hynix has authorized a 54.3 trillion won ($38 billion) capital spending plan to build two advanced memory manufacturing plants, as first reported by Yahoo Finance. The investment will expand production of high-bandwidth memory (HBM), next-generation DRAM, and NAND flash components to meet surging hardware demand from artificial intelligence infrastructure developers.

The largest allocation in the plan directs 35.2 trillion won toward the Y2 fabrication plant in Yongin, South Korea. Designed to manufacture HBM and advanced DRAM chips used in AI accelerators, the Y2 facility is scheduled to break ground in July 2027, with its first cleanroom set to open in June 2029. Planned capital outlays for the Y2 project will run through October 2031.

The remaining 19.1 trillion won will fund the construction of the M17 facility in Cheongju, South Korea, which will focus on NAND flash memory production. Construction on M17 is scheduled to begin in February 2027, with cleanroom completion targeted for December 2028. Financial expenditures for M17 will extend through April 2031. Because cleanroom openings precede tool installation and volume production ramps, neither plant will ship commercial product until late 2028 at the earliest.

Framing the capital outlay, SK Hynix stated that the investment was structured to capture commercial opportunities in alignment with market expansion. Near-term output additions prior to 2029 will rely on ongoing projects, including the company's M15X fab and the initial phase of its Yongin cluster, where cleanrooms are scheduled to open in early 2027.

The board approval on Aug. 7 follows record financial performance during the second quarter. SK Hynix posted Q2 revenue of 79.3 trillion won, representing a 51% surge from the preceding quarter and a 257% increase year-over-year. Operating profit reached 60.5 trillion won, yielding an operating margin of 76%. First-half revenue surpassed 100 trillion won (roughly $70 billion) for the first time in corporate history, driven by broad price increases across DRAM and NAND products.

During the quarter, SK Hynix initiated mass shipments of HBM4, its latest high-bandwidth memory architecture, and finalized long-term supply agreements with approximately 10 major customers. However, executive management noted in its quarterly earnings update that total market demand continues to exceed the company's current production capabilities.

Following the announcement, SK Hynix shares closed at approximately $166 on Thursday, Aug. 13, marking a 7% gain for the session. The stock sits about 18% below its high of $194.80 reached after its July trading debut. Shares currently trade at roughly 8 times historical earnings, with analyst estimates projecting the forward price-to-earnings multiple to fall below 4 over the coming year.