$106B SK hynix Mega Fab Site Progresses Steadily, Yet Slower Than Expected

The construction of SK hynix's $106 billion Yongin Semiconductor Cluster project in South Korea has experienced a slowdown, with only 35% of the initial shell building completed so far, due to the major industry slowdown and reduced investments.

Valued at $106 billion, making it one of the largest semiconductor production hubs in the world
Equipped with advanced EUV process technologies, allowing for high-quality production of DRAM
Expected to require a total investment of over $90 billion by 2046, contributing to SK hynix's position in the global semiconductor market

SK hynix’s ambitious Yongin Semiconductor Cluster project, valued at $106 billion, has experienced a slowdown in construction progress. While the development of the site near Yongin, South Korea, is mostly complete, only 35% of the initial shell building has been constructed so far. This delay is a result of the major industry slowdown that has led big companies to scale back their mid-term and long-term investments.

According to the Korean Ministry of Trade, Industry, and Energy, the first phase of the project was expected to be completed in 2025, with construction commencing in the fourth quarter of 2021. However, SK hynix began reducing its capital expenditures in the latter half of 2022, impacting the progress of the Yongin Semiconductor Cluster. Despite the slowdown, the site development is still ongoing, albeit at a slower pace.

The cluster, which aims to become one of the world’s largest semiconductor production hubs, is designed to house four large fabs on a vast 4.15 million m2 site. Equipped with advanced extreme ultraviolet lithography (EUV) process technologies, these fabs will primarily focus on producing DRAM for PCs, mobile devices, and servers.

If completed as originally planned, the first phase of SK hynix Yongin operations would have been a significant memory production facility costing $25 billion. It would have boasted EUV tools and a capacity of 200,000 wafer starts per month (WSPMs).

While SK hynix’s construction progress may have been slower than anticipated, the company remains committed to the project. The completion of the Yongin Semiconductor Cluster is expected to require an investment of over KRW 120 trillion ($90 billion today) by 2046. Once finished, it will stand as the world’s largest three-story fab and contribute to SK hynix’s position in the global semiconductor market.

Sources: Korean Ministry of Trade, Industry, and Energy; ComputerBase

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Background Information

About SK hynix:

SK Hynix is a important South Korean semiconductor company known for its innovative contributions to the global technology landscape. Specializing in the production of memory solutions, SK Hynix has played a vital role in shaping the semiconductor industry. With a commitment to research and development, they have continuously pushed the boundaries of memory technology, resulting in products that power various devices and applications.

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Technology Explained

EUV: Extreme Ultraviolet Lithography (EUV or EUVL) is an advanced semiconductor manufacturing technique that employs extremely short wavelengths of light in the extreme ultraviolet spectrum to create intricate patterns on silicon wafers. Utilizing a wavelength around 13.5 nanometers, significantly shorter than traditional lithography methods, EUVL enables the production of smaller and more densely packed integrated circuits, enhancing the performance and efficiency of modern microprocessors and memory chips.