Preparing Opportunities in Crisis... Semiconductor Stars' Competition for 'Majungmul'

SK Hynix to Invest 15 Trillion Won, Break Ground Next Month on Cheongju M15X
Global Semiconductor Company Makes Bold Preemptive Investment Move

[Asia Economy Reporter Han Ye-ju] SK Hynix is investing 15 trillion won to build a new semiconductor production plant in Cheongju, Chungcheongbuk-do. Despite forecasts of a 'semiconductor winter' due to falling semiconductor prices and decreased demand, industry analysts say this bold decision by SK Group Chairman Chey Tae-won aims to establish a new growth engine for the next decade. Global semiconductor companies, including Samsung Electronics, are also announcing plans to build and start new factories, engaging in expansion efforts. This is interpreted as a strategic move to prepare for the anticipated 'semiconductor spring' after 2025 through proactive investment amid fierce semiconductor dominance competition.

◆ "Shaking off the perennial second place stigma" ? Gambler Chey Tae-won's 'Bet' = According to industry sources on the 7th, SK Hynix will begin construction next month on 'M15X (eXtension)' on approximately 60,000㎡ of land within the Cheongju Technopolis Industrial Complex to secure a future growth foundation. As an expansion fab of the existing M15 plant, the construction schedule was advanced thanks to the prior acquisition of the site. Being a multi-story facility, its scale is comparable to the combined size of the existing M11 and M12 plants in Cheongju.

This new plant construction is separate from the 'M17 Cheongju Plant Expansion' agenda, which SK Hynix's board deferred on June 29. SK Hynix stated that the start date for M17 construction will be decided considering semiconductor market conditions and management environment.

SK Hynix's move to build a new semiconductor plant comes 4 years and 2 months after the July 2018 Icheon M16 plant. This reflects Chairman Chey Tae-won's gambler spirit, who believes "investment should increase during downturns." It also shows the company's determination to shed the label of 'perennial second place' in both the DRAM and NAND flash markets. From a long-term perspective, it is about securing market responsiveness. Although the semiconductor market is currently frozen due to reduced consumption, the judgment is that investing now will allow increased semiconductor supply when the market recovers in a few years.

SK Hynix has a history of achieving results through bold investments during downturns. After being acquired by SK Group in 2012, it increased investments by more than 10% compared to usual, rising as a global semiconductor leader. At that time, Chairman Chey also made a bold decision. Despite the uncertain future of the semiconductor market, he declared, "I will mobilize the group's capabilities and personal networks to develop Hynix into a top-tier semiconductor company."

M15X is targeted to be operational by 2025. The main products to be produced will likely be decided considering the ongoing construction status of the Yongin semiconductor cluster that SK Hynix is promoting.

◆ Fierce competition in production facility investment as a 'primer' = SK Hynix plans to invest 15 trillion won over five years starting this year to build a new semiconductor plant. This is a preemptive response to the expected 'market rebound' in 2025. The strategy is to make bold future investments to serve as a primer when the memory semiconductor boom arrives.

The reason for the production facility investment competition among Samsung Electronics and global semiconductor companies is the same. Samsung Electronics announced it will invest $205 billion (approximately 283.638 trillion won) over three years for large-scale facility expansion. Currently, it is investing $17 billion (about 22.7936 trillion won) to build a factory in Taylor, Texas, USA, and plans to operate six production lines by constructing three more semiconductor plants in Pyeongtaek, Gyeonggi Province. Recently, it has also concretized plans to establish a semiconductor back-end (packaging) complex in Cheonan, Chungnam.

TSMC, the world's largest foundry company based in Taiwan, announced last year plans to invest $100 billion (about 138.36 trillion won) over the next three years to expand production. For the new plant in Phoenix, Arizona, USA, it is investing $12 billion (about 16.0896 trillion won), with completion expected next year. In Japan, TSMC is jointly investing 1 trillion yen (about 9.7994 trillion won) with Sony to build a plant in Kumamoto Prefecture, aiming for mass production by the end of 2024. TSMC plans to spend $44 billion (about 60 trillion won) on foundry facility investments this year.

Intel is partnering with a global asset management firm to invest $30 billion (about 40.224 trillion won) to build a new semiconductor plant in Arizona, USA. Earlier in January, Intel announced plans to build a semiconductor plant in Columbus, Ohio, USA, and indicated that investments could reach $100 billion over the next decade. It has also announced plans for a $100 billion scale investment in Germany.

Recently, Micron Technology declared it will invest $15 billion (about 20.763 trillion won) to build a new memory semiconductor plant in Idaho, where its headquarters is located. Last month, Micron announced it would invest $40 billion (about 55.36 trillion won) in U.S. memory semiconductor production facilities, creating 40,000 new jobs by 2030.

An industry insider explained, "Although semiconductor demand is declining recently due to global economic recession and supply chain instability, the semiconductor market cycle is shortening compared to the past. In a situation where it is uncertain when the current downturn will turn into a boom, slowing down investment too much could make it difficult to keep up with the market."

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