Maintaining Chip Competitiveness
Memory manufacturers have been enjoying a long period of increased prices (and profits) for some time now. For SK Hynix, they are using this to further expand their capability with plans for four new chip plants.
The South Korean company has announced that they are spending $107 billion USD on the project. Which is crucial if they wish to remain competitive in light of recent Chinese semiconductor company expansions. China imports $270 billion USD from foreign semiconductor companies annually, which they wish to minimize.
China has also expressed concerns of DRAM price fixing issues for the past few years. Mostly due to the fact that South Korean and Taiwanese companies dominate the memory market.
The Chinese government has since announced several multi-billion dollar investments to bring local manufacturing capabilities closer to the same level as the market leaders. However, experts believe Chinese companies lack the IP and technology to pull this off on their own. In fact, Micron accuses the country of corporate espionage and stealing memory secrets.
The new chip fabrication plants are on a 4.5 million square meter site in Southern Seoul. They are expected to break ground by 2022.
What About Existing SK Hynix Factories?
Aside from the new chip fabrication plants, SK Hynix has also earmarked $49 billion in bringing their existing factories up to speed. Especially since analysts predict an upcoming surge in demand brought about by new technologies like 5G networks and artificial intelligence
