SK hynix to Build M15X Fab in Cheongju

Rhea-AI Summary

SK hynix has announced plans to construct the M15X fabrication plant in Cheongju, South Korea, commencing construction in October 2022 and set for completion in early 2025. The company will invest 15 trillion won over five years to enhance its memory chip production capabilities. This initiative aims to solidify SK hynix's market position amidst current economic challenges, as the demand for memory chips is projected to recover by 2025. The M15X will be SK hynix's first new fab since celebrating its 10th anniversary.

Positive

• Investment of 15 trillion won aims to solidify future growth.
• Construction of the M15X fab will enhance production capacity ahead of expected market recovery in 2025.
• Company's consistent investment strategy has historically led to significant turnaround and growth.

Negative

• Current demand for memory chips is rapidly declining due to global economic slowdown.
• Market uncertainties and supply chain instability could impact profitability in the short term.

• Company to break ground in October, complete construction in early 2025 with plan to invest 15 trillion won over 5 years
• M15X to be first new fab since company commemorated 10^th anniversary this year
• Investment during economic downturn to lay foundation for future growth

SEOUL, South Korea, Sept. 6, 2022 /PRNewswire/ -- SK hynix Inc. (or "the company", www.skhynix.com) announced today that it will build the M15X(eXtension), a new fabrication plant, in Cheongju, Chungcheongbuk-do, in preparation for future growth.

The company will start construction of the M15 extension on the site it secured previously earlier than initially planned, considering various market situations.

The new plant will be built from October on the 60,000㎡ land located in the Cheongju Technopolis industrial complex and completed early 2025. A total of 15 trillion won will be injected over the next five years to build the fab and set up production facilities. The fab will be a two-story building equivalent to a combination of M11 and M12 in size.

As for the next M17 fab, the company will decide construction plan after reviewing overall business environment including changes in the semiconductor business cycle.

"Looking back on the past 10 years, SK hynix could grow into a global company as it boldly carried out investment during crisis," said Vice Chairman and Co-Chief Executive Park Jung-ho. "As we look to prepare for the next 10 years now, I believe starting the M15X will be a first step to lay foundation for a solid future growth."

SK hynix has so far solidified its leadership in the memory market through preemptive and bold investments despite rapid changes in business environment. In 2012, when the broader industry was scaling back investments and the company was in the red, SK hynix decided to increase investment by more than 10% compared with a year ago, resulting in a dramatic turnaround by the end of the year. Market uncertainties continued to linger, but in 2015, the company built the M14 fab in Icheon to prepare for the next boom in the memory business, which led to record-high financial results for two straight years from 2017.

Since it became a member of SK Group in 2012, SK hynix has pushed forward investments for the next 10 years in accordance with the Future Vision it has made public in 2015. The Vision was the company's pledge that it will invest 46 trillion won from 2014 to build three more fabrication plants including the M14 in Icheon. Such promise was met earlier than targeted following completion of the M15 in Cheongju and the M16 in Icheon in 2018 and 2021, respectively.

Demand for memory chips is rapidly falling in the wake of the global economic slowdown and instability of the supply chain, but experts foresee that the business will start to recover steadily from 2024 and rebound in 2025 as the memory business cycle is increasingly getting less volatile in recent years.

The plan to build the M15X comes as SK hynix prepares for the next upturn expected to come in 2025. With the construction of the M15X, the company will be ready to provide more memory chips when the industry enters a boom again.

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world's top tier semiconductor supplier offering Dynamic Random Access Memory chips ("DRAM"), flash memory chips ("NAND flash") and CMOS Image Sensors ("CIS") for a wide range of distinguished customers globally. The Company's shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.

View original content:https://www.prnewswire.com/news-releases/sk-hynix-to-build-m15x-fab-in-cheongju-301617986.html

SOURCE SK hynix Inc.

FAQ

What is the M15X fab being built by SK hynix?

The M15X fab is a new fabrication plant in Cheongju, South Korea, aimed at enhancing memory chip production.

When will construction of the M15X begin and end?

Construction of the M15X will start in October 2022 and is expected to be completed in early 2025.

How much is SK hynix investing in the M15X fab?

SK hynix plans to invest 15 trillion won over five years for the M15X fabrication plant.

Why is SK hynix building the M15X fab during an economic downturn?

The investment is seen as a strategic move to prepare for future growth as demand for memory chips is expected to recover by 2025.

What is the expected impact of the M15X fab on SK hynix's market position?

The M15X is expected to solidify SK hynix's leadership in the memory chip market as it prepares for an anticipated industry boom.