SK Hynix Expands CAPEX for HBM Production

In response to the escalating demand for high bandwidth memory (HBM), SK Hynix has announced an expansion of its capital expenditure (CAPEX) beyond its initial projections. This strategic move is designed to proactively establish the necessary production infrastructure to meet the growing supply volumes, especially with the increasing number of potential customers including NVIDIA, Broadcom, and Amazon.

Proactive Measures for Future Demand

During the Q2 earnings conference call on July 24, SK Hynix President Song Hyun-jong highlighted the company's commitment to preemptive investment to ensure timely responses to future HBM supply demands. "This year’s investment scale will increase compared to the original plan, with the majority allocated towards HBM production," stated Song.

Strategic Production Base Utilization

Given that HBM requires more production capacity than general DRAM, SK Hynix is focusing on utilizing the M15X in Cheongju as a next-generation HBM production base, set to commence operations from Q4 this year. Additionally, the company is continuing infrastructure investments for global expansions in Yongin and Indiana, USA, to prevent any supply constraints.

Innovation in DRAM Technology

Investments are also being directed towards the conversion to next-generation DRAM, specifically the 1c (6th generation 10nm class) DRAM, with a full-scale ramp-up anticipated next year. SK Hynix has already made headlines by successfully developing the world’s first 16 gigabit (Gb) DDR5 DRAM based on the 1c process last year.

Industry Expectations

With the surge in HBM demand, industry experts predict SK Hynix’s facility investment for this year could reach the mid-20 trillion won range, marking a significant increase from previous years and underscoring the company's leadership in the semiconductor industry.