SK Hynix's board has approved 54.3 trillion won, about $38 billion, for two new memory plants. Neither will open its first cleanroom before December 2028, even as the company says current demand already exceeds what it can supply.
SK Hynix's board signed off on 54.3 trillion won of spending on Aug. 7, about $38 billion, split across two new plants. Neither facility opens its first cleanroom before December 2028 at the earliest. For a memory market where prices have been surging on short supply, that gap between approving capacity and producing from it may be the most important number in the announcement.
Two fabs, two clocks
The larger commitment, 35.2 trillion won, goes to the Y2 fab in Yongin, which will make high-bandwidth memory and next-generation DRAM. Y2 breaks ground in July 2027, and its first cleanroom doesn't open until June 2029, with spending running through October 2031.
The remaining 19.1 trillion won funds the M17 facility in Cheongju, a NAND flash plant. M17 breaks ground in February 2027 and targets its first cleanroom in December 2028, about six months ahead of Y2, with spending running through April 2031. A cleanroom opening comes before equipment installation and volume shipments, so the soonest either plant opens its first cleanroom is nearly two and a half years away.
Record quarter behind the spending
The urgency follows results SK Hynix reported a week earlier. Second-quarter revenue came in at 79.3 trillion won, up 51% from the first quarter and 257% from a year earlier, while operating profit reached 60.5 trillion won for an operating margin of 76%, both records. DRAM and NAND prices both rose significantly from the first quarter, and first-half revenue crossed 100 trillion won, about $70 billion, for the first time in the company's history.
The company also began mass shipments of HBM4, its newest high-bandwidth memory, during the quarter and said it has finalized long-term agreements with about 10 key customers. Customer demand exceeds the company's supply capabilities, management said in its second-quarter update. The supply SK Hynix can add before 2029 comes from projects already in motion, its M15X fab and the first phase of the Yongin cluster, whose cleanroom opens in early 2027, not from the two plants just approved.
Shares near their post-IPO high
Shares closed at about $166 on Thursday, Aug. 13, up 7% for the day, with the stock's high since its July debut, $194.80, sitting about 18% above that close. The stock trades at about eight times earnings, a multiple that falls under four against analysts' forecasts for the coming year.
Memory cycles have punished confident capacity plans before, and it is usually demand, not construction, that delivers the surprise. But for at least the next two years, no relief in supply comes from the fabs approved this month.
Source: Motley Fool
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