SK Hynix said it would be spending $107 billion for building four manufacturing facilities to enhance its memory chip making capacity, Reuters reported.
SK Hynix will build the chip fabrication plants on a 4.5 million square meter site south of Seoul beginning 2022, complementing two existing domestic factories that will receive a separate 55 trillion won ($49 billion) investment over the next decade. Its factories will be producing DRAM and next-generation chips.
“There will be more demand for self-driving vehicles in the next 10 years or as early as in 2023 or 2024,” said analyst Kim Young-gun at Mirae Asset Daewoo. “That will create more chip demand for SK Hynix, as will the commercialization of 5G networks over the next few years.”
China has been aggressively encouraging chipmaking investment to curb reliance on imports amid a trade spat with the United States.
China is the world’s largest chip consumer, importing $270 billion worth in 2017 – more than its total imports of crude oil.
SK Hynix said the investment plan will see over 50 domestic and foreign suppliers join at the site in Yongin, 40 km from the capital.
The chipmaker, which has a third plant in the Chinese city of Wuxi, has not determined the increase in production capacity.
SK Hynix was a member of a consortium led by U.S. private equity firm Bain Capital which bought the majority of Toshiba’s memory chip business last year.