SK Hynix Steps Up P&T7 Advanced Packaging Investment to Address AI HBM Shortage

High-bandwidth memory, or HBM, is a critical component in AI accelerators because it allows processors to access large volumes of data at high speed. SK Hynix’s planned US advanced-packaging facility is intended to expand capacity for the fast-growing AI market, strengthen supply-chain ties with partners including Nvidia, and support Washington’s effort to localize semiconductor production through the CHIPS Act.

SK Hynix will hold a groundbreaking ceremony on Aug. 27 for its advanced-packaging plant in Indiana, a project involving $3.87 billion in investment and support under the US CHIPS Act. The facility will focus on HBM used in artificial-intelligence systems and is scheduled to begin mass production in the second half of 2028, positioning the South Korean memory maker to capture rising demand from AI data centers.

Artificial intelligence data-center spending is driving demand for high-bandwidth memory and enterprise NAND, turning memory capacity into a strategic bottleneck for the technology industry. SK hynix, a leading supplier of HBM and advanced DRAM, is expanding in South Korea to secure the output needed for AI accelerators and servers. The scale of the commitment signals that the company sees AI-related memory demand as a structural shift, not merely another short-lived semiconductor cycle.

On Aug. 7, 2026, SK hynix said its board approved 54.3 trillion won ($38.4 billion) of investment through 2031, allocating 35.2 trillion won to the Y2 fab in Yongin and 19.1 trillion won to the M17 plant in Cheongju. Y2 will produce next-generation DRAM, including HBM, while M17 will focus on enterprise NAND. Cleanrooms are expected to begin opening in 2029, and the company has advanced completion of its broader Yongin cluster to 2033 from 2045.

High-bandwidth memory, or HBM, is a critical component that gives AI accelerators rapid access to data, and supply has fallen short as data centers expand worldwide. SK hynix currently controls about 60% of the HBM market and is using advanced packaging and next-generation products to strengthen its lead while competing with Samsung Electronics and Micron for orders from major cloud providers.

SK Group Chairman Chey Tae-won recently pledged to sharply increase SK hynix's HBM output and accelerate the latest HBM4 into mass production to narrow the supply-demand gap for AI chips. He said adding wafer capacity takes at least four years and that tight global supplies could persist until 2030. The reports did not disclose the investment amount for the expansion or a specific production start date.