Construction of $106B SK hynix Mega Fab Site Moving Along, But At Slower Pace

When a major industry slowdown occurs, big companies tend to slowdown their mid-term and long-term capacity related investments. This is exactly what happened to SK hynix’s Yongin Semiconductor Cluster, a major project announced in April 2021 and valued at $106 billion. While development of the site has been largely completed, only 35% of the initial shell building has been constructed, according to the Korean Ministry of Trade, Industry, and Energy.

“Approximately 35% of Fab 1 has been completed so far and site renovation is in smooth progress,” a statement by the Korean Ministry of Trade, Industry, and Energy reads. “By 2046, over KRW 120 trillion ($90 billion today, $106 billion in 2021) in investment will be poured to complete Fabs 1 through 4, and construction of Fab 1’s production line will commence in March next year. Once completed, the infrastructure will rank as the world’s largest three-story fab.”

The new semiconductor fabrication cluster by SK hynix announced almost exactly three years ago is primarily meant to be used to make DRAM for PCs, mobile devices, and servers using advanced extreme ultraviolet lithography (EUV) process technologies. The cluster, located near Yongin, South Korea, is intended to consist of four large fabs situated on a 4.15 million m2 site. With a planned capacity of approximately 800,000 wafer starts per month (WSPMs), it is set to be one of the world’s largest semiconductor production hubs.

With that said, SK hynix’s construction progress has been slower than the company first projected. The first fab in the complex was originally meant to come online in 2025, with construction starting in the fourth quarter of 2021. However, SK hynix began to cut its capital expenditures in the second half of 2022, and the Yongin Semiconductor Cluster project fell a victim of that cut. To be sure, the site continues to be developed, just at a slower pace; which is why some 35% of the first fab shell has been built at this point.

If completed as planned in 2021, the first phase of SK hynix Yongin operations would have been a major memory production facility costing $25 billion, equipped with EUV tools, and capable of 200,000-WSPM, according to reports from 2021.

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

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