TLDR
- SK Hynix approved a $38.15 billion investment to expand chip production at two South Korean sites.
- New facilities planned for Yongin (DRAM) and Cheongju (NAND), targeting 2028 and 2029 openings.
- SKHY stock dropped nearly 5% despite the announcement.
- DRAM makers are currently only meeting 75-80% of global demand.
- TipRanks analysts give SKHY a Strong Buy consensus with a $245.50 price target.
SK Hynix stock (SKHY) fell close to 5% on Friday after the company announced a $38.15 billion plan to expand its semiconductor production capacity in South Korea.
The stock has dropped from around $168 to $143 since listing on the Nasdaq on July 10.
The board approved 54.3 trillion won in total investment. That breaks down to 35.2 trillion won for a new DRAM facility in Yongin, south of Seoul, and 19.1 trillion won for a NAND fabrication plant in Cheongju, in central South Korea.
The company says the decision follows the disclosure of its medium- to long-term plan back in June.
SK Hynix $SKHY plans ~$38.3B of new fab investment in South Korea through 2031:
> ~$24.9B for Yongin Phase 2
> ~$13.5B for M17 in Cheongju pic.twitter.com/XG1c7Yt9rf— Wall St Engine (@wallstengine) August 7, 2026
SK Hynix cited Omdia research projecting that demand for DRAM and NAND chips will grow 19% annually through 2030.
“This investment is a decision aimed at ensuring we do not miss opportunities as the market grows,” a spokesperson said.
The new Yongin Y2 facility will be the second of four planned fabs at the Yongin semiconductor cluster. Construction is set to start in July 2027, with the first cleanroom targeted for June 2029. The Cheongju M17 expansion begins construction in February, with its first cleanroom expected by end of 2028.
SK Hynix said under a longer-term plan, it intends to invest a total of 700 trillion won across both locations.
Supply Falling Short of Demand
DRAM manufacturers are currently only meeting between 75% and 80% of global demand, according to industry estimates. That gap is a key driver behind the expansion push.
SK Hynix’s production capacity is already sold out through 2027, and the company has been locking in long-term customer deals.
Despite that, some investors remain concerned about whether profit margins can hold at those levels over time.
HBM and Next-Gen Products
The company is also pushing forward on next-generation products. It plans to bring HBM4 samples to leading AI chip designers in the second half of 2026, with mass production of both HBM4 and HBM4E expected in 2027.
SK Hynix is a key Nvidia supplier and one of three main players in the global high-bandwidth memory market alongside Samsung Electronics and Micron Technology.
The expansion is designed to strengthen that position as demand for HBM and advanced memory products keeps climbing.
On TipRanks, SKHY carries a Strong Buy consensus from 9 analysts. The consensus price target sits at $245.50, representing a 71% upside from current levels. The highest price target on the stock is $320.
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