SK Hynix commits $38B to new fabs as Nvidia AI memory demand surges

SK Hynix has committed roughly 54.3 trillion won, about $38.3 billion, to build new memory chip plants in South Korea. Its board approved the spend on Friday, splitting it across two domestic sites to run through 2031, according to Reuters.

Most of it, 35.2 trillion won, funds a second DRAM fab in Yongin, called Y2. The remaining 19.1 trillion won backs a new NAND plant in Cheongju.

DRAM, especially the high-bandwidth memory that feeds AI accelerators, is where SK Hynix has built its dominance and its relationship with Nvidia. The stacked memory wrapped around each high-end Nvidia GPU comes almost entirely from SK Hynix. NAND is the steadier, lower-margin business that diversifies revenue when the AI cycle wobbles.

Demand for AI memory is accelerating. SK Hynix reported record second-quarter revenue of 79.3 trillion won in July, up 257% year over year, with a 76% operating margin, according to CNBC.

The capacity is years away. Construction on Yongin's Y2 starts in July 2027, with its first cleanroom opening in June 2029. Cheongju breaks ground in February 2027, targeting a first cleanroom in December 2028.

Investors have been jumpier than the fundamentals. Shares fell 9.6% on the day of July's record results, which missed elevated analyst expectations. "In the AI era, technological competitiveness alone is not enough," the company said, per Korea Herald.

SK Hynix is applying the same logic Nvidia forces onto its own supply chain — commit capital years ahead to lock in a lead. The bet is that AI memory demand holds through the decade, and that being Nvidia's supplier is worth building for years before the first chip ships.