SK Hynix's memory business is undergoing a rapid recovery; however, facing overall semiconductor industry uncertainty, it is reportedly delaying the construction schedule of the M15X factory in Cheongju.
According to Korean media Money Today, citing industry sources, SK Hynix had initially planned to restart construction of the M15X factory in February and had completed preparations, pending only approval from the CEO. However, SK Hynix ultimately decided to revisit the matter three months later.
Previously, in October 2022, SK Hynix announced a plan to invest KRW15 trillion(approximately US$11.3 billion) to build the M15X new factory in the Cheongju Techno Park, covering an area of 60,000 square meters, roughly equivalent to the combined size of the M11 and M12 production lines, with completion expected by early 2025. Initially, the industry anticipated the M15X factory to produce NAND Flash, but there were rumors of investment delays due to deteriorating NAND market conditions.
Benefiting from the surge in demand for artificial intelligence (AI), SK Hynix has turned a profit in the fourth quarter of 2023 by supplying high-value-added products like High Bandwidth Memory (HBM). To meet the demand for HBM and remain competitive in the market, there were reports in January 2024 that SK Hynix had selected the Cheongju M15X as the production base for HBM and planned to accelerate the construction progress in 2024.
However, with the latest news of the delay, the industry believes SK Hynix is emphasizing profitability improvement instead of aggressively pursuing investments. Regarding this matter, individuals associated with SK Hynix stated that the M15X is observing market conditions, and the restart time has not been determined yet.
During the fourth-quarter earnings conference in 2023, SK Hynix mentioned the necessity of focusing investments on areas that ensure profitability and demand amid rapidly increasing investment costs. Unlike in the past, the focus will be on value conversion and maximizing space utilization, aligning with the aforementioned analysis.
In addition to SK Hynix, Samsung Electronics is reportedly halting some construction operations at the Pyeongtaek Semiconductor Complex's fifth factory (P5). This indicates that even as the semiconductor market gradually improves, memory industry players still face challenges in balancing profitability and production capacity competitiveness.
