Nvidia supplier SK Hynix to invest $6.8 billion in South Korea chip plant

By Joyce Lee

SEOUL (Reuters) -The world's second-largest maker of memory chips, SK Hynix, said on Friday it had decided to invest about 9.4 trillion won ($6.8 billion) in its first chip plant in the South Korean city of Yongin.

The Nvidia supplier, which reported on Thursday its highest earnings since 2018 and flagged rising AI chip demand, has been planning investment since 2019 on four new chip plants at a semiconductor cluster at the site near Seoul.

"The Yongin cluster will be the foundation for SK Hynix's mid- to long-term growth," said Kim Young-sik, the firm's head of manufacturing technology.

The investment aims to respond to demand for AI semiconductors and secure future growth, SK Hynix said in a regulatory filing.

The sprawling 4.2 million sq. m. site, will eventually house the company's four planned chip plants producing next-generation semiconductors as well as more than 50 small local firms in the chip industry, SK Hynix said in a statement.

Friday's figure is expected to cover work on the first plant until end-2028, for utilities such as water and electricity, as well as business support and welfare facilities.

It will include a "mini-fab", or research facility that can process 300-mm silicon wafers, to allow domestic chip materials and equipment makers to test their products in a realistic setting, the company said.

The news follows the company's plan, unveiled in April, to invest about $3.87 billion for an advanced packaging plant and research and development facility for AI products in the U.S. state of Indiana.

($1=1,386.4000 won)

(Reporting by Joyce Lee; Editing by Jacqueline Wong and Clarence Fernandez)