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SK Hynix, one of the world’s largest manufacturers of dynamic random access memory (DRAM) and NAND flash, said this week it would expand its DRAM production in Icheon, Gyeeonggi Province by constructing a new plant. The new chip manufacturing facility will take advantage of leading-edge production tools as well as process technologies, which will make the company’s DRAM products more competitive.

“SK Hynix plans to construct new lines in Icheon where one of our key technology compounds are located, as existing chip lines there called ‘M10’ are obsolete and unprofitable,” said company spokesman Son Kyung-bae in an interview with the Korea Times.

The new fab will cost billions of dollars and their construction will take several years. The company stressed that it will be flexible in terms of timing of the investments and will consider market conditions before making decisions regarding exact manufacturing capacities.

The M10 plant was constructed in 1994; initially it processor 200mm wafers and in 2005 was upgraded to 300mm equipment. Nonetheless, starting from 2006 the chipmaker asked the government to allow construction of a new fab to replace the M10. Until recently, the authorities did not allow SK Hynix to expand its production.

In the recent years almost no company could make money selling DRAM due to oversupply of computer memory amid slow demand for PCs. Starting second half of 2012, DRAM makers started to cut DRAM production, but expand manufacturing of LPDDR memory for mobile devices. As a result, DRAM prices increased significantly in the recent quarters.

Market analysts expect the total amount of investment will reach up to 13.5 trillion won (around $1.269 billion) as technology complexity continues to increase.

Tags: SK Hynix, Hynix, DRAM, Business

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