SK Hynix Builds Largest and First Next-Generation DRAM Production Line... Operating Profit Expected to Double This Year

Early Completion of Icheon M16 Plant
4th Generation 10nm Class with EUV Process Applied
No Competitor Has Yet Achieved Mass Production Success

Choi Tae-won, Chairman of SK Group, is delivering a greeting at the completion ceremony of the semiconductor factory M16 held on the 1st at the SK Hynix headquarters in Icheon, Gyeonggi Province.
[Photo by SK Hynix]

[Asia Economy Reporters Heungsun Kim, Suyeon Woo, Hyunjin Jung] SK Hynix is expected to accelerate its efforts to dominate the next-generation memory semiconductor (DRAM) market, applying cutting-edge extreme ultraviolet (EUV) processes, as it completed the construction of the M16 factory at its headquarters in Icheon, Gyeonggi Province, after more than two years of construction on the 1st.

Realizing Fine Processes... Suitable for Drawing Detailed Circuits
Greatly Enhances Product Performance and Productivity
Negotiations Underway for Additional EUV Equipment

SK Hynix's M16 fab (manufacturing plant) is regarded as the world's largest new memory semiconductor production line. Starting from the second half of this year, it plans to mass-produce 4th generation 10-nanometer class (1a) DRAM using EUV processes, a product that no competitor has yet successfully mass-produced.

DRAM manufacturers have expanded new products from the 1st generation 1x after shipment by reducing circuit line widths through processes to the 2nd generation (1y) and 3rd generation (1z). The 1a DRAM to be mass-produced at the M16 fab is called 4th generation technology, surpassing the existing top-tier 1z. The key is the introduction of EUV lithography equipment.

To produce semiconductors, circuits that serve as blueprints must first be drawn on wafers (semiconductor discs). EUV has a shorter wavelength than the existing argon fluoride (ArF) light process, making it much more suitable for drawing finer circuits. An industry insider explained, "The finer the circuit implementation, the fewer the process steps, which improves product performance and productivity," adding, "It's like using a thinner and more precise pen to make the line thinner."

M16 Fab Exterior Photo by SK Hynix

Earlier, on the 27th of last month, U.S. Micron Technology announced it would mass-ship 1a DRAM from its Taiwan fab, the first in the semiconductor industry. However, it is known that the product was produced using the existing ArF process, not EUV.

SK Hynix stated, "We are also in close discussions with equipment suppliers about securing additional EUV equipment in the mid to long term," and added, "Increasing the utilization of this equipment in the future will significantly strengthen our leadership in fine process technology for memory semiconductors." EUV lithography equipment is exclusively supplied by the Dutch semiconductor equipment company ASML and is priced at nearly 200 billion KRW per unit due to its advanced technology.

Completion Three Years Ahead of Schedule, Early Achievement of 'Future Vision',
World's Largest with Three-Story Structure
'Financial Story' Also to be Materialized

Previously, SK Hynix declared a 'Future Vision' to build three new fabs in Korea over ten years starting in 2014, aiming to secure leadership in the semiconductor industry. Accordingly, it completed M14 at its Icheon headquarters in 2015 and built the M15 fab in Cheongju, Chungbuk, in 2018. With the completion of M16 on this day, the goal was realized three years ahead of schedule.

SK Hynix plans to produce 1a DRAM products using EUV equipment starting in the second half of this year. The full-scale application target of the EUV process is set for 5th generation DRAM. Jongwon Noh, SK Hynix's Chief Financial Officer (CFO), explained, "Most fabs have a double-layer structure, but M16 is the world's largest fab with a three-story structure," adding, "We will flexibly adjust mass production plans to meet market demand while monitoring the DRAM market situation until the end of the year."

M16 Fab Completion Ceremony
Photo by SK Hynix

With the full-scale start of 1a DRAM mass production, SK Hynix's performance rebound is expected to accelerate. Some in the securities industry forecast that SK Hynix will achieve operating profits around 12 trillion KRW this year due to the effects of new production facilities. This figure is more than double last year's operating profit of 5.0126 trillion KRW.

SK Hynix plans to materialize the 'Financial Story' announced last October, coinciding with the completion of M16. The Financial Story is an internal and external declaration to enhance competitiveness in the memory industry with both DRAM and NAND flash wings, and to focus on creating social value (SV) and practicing environmental, social, and governance (ESG) management. It plans to implement this in earnest starting this year.

To compensate for its disadvantage in the NAND market, where it ranks fifth globally, SK Hynix acquired Intel's NAND business unit last October and announced a roadmap last month to achieve goals by 2030 in four major SV creation areas: 'Environment,' 'Mutual Growth,' 'Social Safety Net,' and 'Corporate Culture.'

SK Group Chairman Taewon Chey said, "As many people helped in the birth process of M16, now M16 will contribute to their happiness," and urged, "Please explore various possibilities not only in economic value but also in ESG aspects such as win-win cooperation with partners, environmental protection, and community development."

This content was produced with the assistance of AI translation services.