SK hynix (SKHY) shares fell 5.84% to $135.15 after the South Korean chipmaker approved a major expansion of domestic memory production capacity. The company committed approximately 54 trillion won to new fabrication facilities in Yongin and Cheongju, aimed at meeting rising AI-related memory demand. SK hynix currently supplies HBM3E to NVIDIA and other AI accelerator manufacturers, making this capacity build-out central to sustaining its lead in a market where Samsung Electronics and Micron Technology are also racing to expand.

The projects will expand high bandwidth memory (HBM), advanced DRAM, and NAND capacity while strengthening SK hynix's long-term domestic production network. South Korea has designated semiconductor self-sufficiency a national priority, and the Yongin cluster forms a core piece of that strategy.

Yongin Y2: HBM and DRAM Capacity Expansion

SK hynix approved 35.2 trillion won for Yongin Y2, the second of four planned fabs within the broader semiconductor cluster. The investment forms part of a larger plan covering 600 trillion won in Yongin and 100 trillion won in Cheongju.

Construction is expected to begin in July 2027, with the first Y2 cleanroom scheduled to commence operations in June 2029. The facility will span approximately 1.13 million square meters and produce HBM alongside other next-generation DRAM products at scale.

Work on Yongin Y1 continues toward its first cleanroom opening, which remains scheduled for February 2027. SK hynix now targets completion of all four Yongin fabs by 2033, twelve years ahead of its original schedule.

Power and water infrastructure for Y1 and Y2 operations has reached approximately 99% completion across the Yongin cluster site. The company plans staged equipment installation, aligning actual production capacity with customer demand to improve long-term capital efficiency.

According to Omdia, DRAM and NAND demand is projected to grow 19% annually through 2030, supporting SK hynix's broader expansion strategy.

Cheongju M17: NAND and Enterprise SSD Capacity

SK hynix also approved 19.1 trillion won for Cheongju M17, targeting growing NAND and enterprise SSD market demand. The company selected Cheongju because its established power, water, and production infrastructure is expected to support a faster construction schedule.

The campus already houses M11, M12, and M15 fabs, allowing M17 to connect directly with existing memory production operations. M17 will cover approximately 680,000 square meters, with construction scheduled to begin in February 2027. SK hynix expects its first cleanroom to open in December 2028, with planned investment continuing through April 2031.

Enterprise SSD demand continues to rise as AI services require greater storage capacity for expanding workloads and complex inference systems. Key-value cache storage could further drive NAND demand by reducing repeated calculations during AI inference and supporting larger AI models.

SKHY Stock Reaction

SKHY stock fell 5.84% to $135.15, retreating sharply from earlier session levels near $144. The investment places execution, demand timing, and capital efficiency at the center of SK hynix's next major expansion phase. Upcoming milestones to watch include the Y1 cleanroom opening in February 2027 and competitor capacity announcements from Samsung and Micron, both of which have outlined their own HBM roadmaps through the end of the decade.