SK Hynix plans to invest $51 billion in a new NAND factory to capitalize on the AI memory trend.

      SK Hynix plans to invest 80 trillion won, approximately $51.46 billion, to build a new NAND flash memory factory in Cheongju, South Korea, with production expected to commence in the first half of 2029. CEO Kwak Noh-jung announced this initiative at an event attended by President Lee Jae Myung, integrating the new facility, named M17, into a larger effort by South Korea’s two major memory manufacturers to address industry demand challenges.

      This announcement follows Samsung’s recently revealed $647 billion investment plan focused on the same under-supplied segment of the market. The $51.46 billion amount pertains specifically to the NAND factory. When accounting for a separate advanced packaging plant, SK Hynix's total investment commitment rises to 100 trillion won, or around $64 billion.

      The second facility, named P&T7 and also located in Cheongju, is designated for wafer-level packaging and is slated for completion by 2027, two years ahead of the main factory. Reuters reported both investment figures, which were supported by news from Korean sources.

      M17 will be SK Hynix’s fourth NAND factory and indicates confidence that flash storage, traditionally overshadowed by high-bandwidth memory (HBM) chips used in AI accelerators, still requires significant new capacity. NAND chips are employed for long-term data storage in solid-state drives, in contrast to DRAM and HBM that serve as working memory in AI servers.

      Industry analysts, such as TrendForce and DigiTimes, have indicated a tightening supply of NAND as data center operators increase their storage purchases. Despite the attention on SK Hynix’s stock performance focusing more on HBM, there is growing concern over NAND shortages.

      On June 29, President Lee’s administration unveiled an investment plan estimated at between $520 billion and $576 billion, based on different media reports, with Samsung and SK Hynix both pledging to develop new factories and packaging facilities in the Chungcheong region. Reports from Reuters and Nikkei Asia have attributed this surge in spending to worries that the global memory shortage, largely driven by AI data center expansions, might last until 2027 instead of easing this year.

      This shortage has already affected consumer electronics, leading to significant memory price increases that prompted Apple to discontinue its entry-level Mac Mini. Additionally, DRAM buyers have sought alternative suppliers, including reports of Corsair shifting towards Chinese-made DRAM for some of its products.

      The significant responses from SK Hynix and Samsung suggest that both companies anticipate the supply constraints will extend well beyond the next product cycle. Construction of M17 is expected to start next year, allowing SK Hynix approximately three years to complete the facility, which is a typical timeframe for this type of project. Neither SK Hynix nor the South Korean government has clarified how the investments will be financed, outside of the company’s existing capital plans.

      Cheongju, already home to SK Hynix’s current NAND operations, is emerging as the focal point for the company’s storage goals into the next decade. Last year, SK Hynix surpassed Samsung as South Korea’s most valuable publicly listed firm, a change driven largely by the HBM surge rather than NAND, making this renewed investment in flash storage noteworthy.

      While additions to NAND capacity often do not garner as much attention as HBM supply agreements, both product lines are increasingly vying for the same wafer starts and packaging resources at SK Hynix's Korean facilities. Executives from both firms have openly acknowledged that memory shortages are limiting the pace at which the broader AI industry can expand.

      The South Korean government has positioned this combined investment as a key aspect of national strategy, viewing the country’s memory leadership as a valuable asset to be upheld via direct policy support. However, it has not yet been publicly disclosed whether this will include tax incentives or expedited approvals for the Chungcheong region's factories. For now, SK Hynix’s commitment stands clear: two plants, one region, and a 2029 target.