SK Hynix to invest 3.16 trillion in South Korea and China

South Korea's SK Hynix Inc said today it planned to invest 3.16 trillion won ($2.7 billion) at home, and in China to boost memory chip production, as it looked to capitalise on an industry-wide surge in demand.

The bulk of investment by the No 2 memory maker in the world would go towards building a new plant to make NAND flash chips used for long-term data storage.

Increased demand for mobile devices along with the adoption of SSD storage in personal computers and data servers had also prompted Samsung Electronics Co Ltd and Toshiba Corp to hike spending on chip production.

"In order to grow further, it is important to secure production facilities in advance to deal with NAND Flash market growth to be led by 3D NAND solutions," SK Hynix said in a statement.

Around 2.2 trillion won would be spent on the new NAND chip plant to be located in South Korea, while another 950 billion won would go towards boosting DRAM capacity at its existing facilities at Wuxi, China.

The strong demand for memory chips had also driven strong gains in share prices and increased chipmakers' earnings.

SK Hynix shares were  up around 49 per cent this year, on track to register their biggest gain since 2009. 

The company said it plans to invest in its chip plant in Cheongju, North Chungcheong Province from August next year to June 2019. 
 
''The new chip plant in Cheongju will be a key base for SK hynix, which is preparing for the future, such as the Fourth Industrial Revolution,'' said SK hynix's CEO Park Sung-wook in a company statement released today. 
 
According to the market research firm IHS Technology, the global NAND flash market was expected to rise 44 per cent on average annually to hit 500 million gigabytes in 2020 from 82 million gigabytes last year.