SK hynix to invest W10tr in memory business

Bolstered by its record-high net profit in 2017, South Korean memory chip maker SK hynix unveiled Thursday an investment plan worth over 10 trillion won ($9.4 billion) for this year, which will be mostly used for completing its new 3-D NAND plant.

During a conference call held for its 2017 earnings, Lee Myung-young, vice president of SK hynix, said this year’s investment will be larger than the previous year’s 10.3 trillion won, with the completion of the M15 fabrication facility under construction in Cheongju, North Chungcheong Province, expected this year, and an expansion in Wuxi, China.

“A final investment plan is still being discussed in order to reflect possible changes in market demand,” Lee said.

The remarks were made after the company announced its record-high net profit earned in 2017. 

SK hynix posted 30.1 trillion won in consolidated sales for the fiscal year 2017 and 13.7 trillion won in operating profit. Its net income stood at 10.6 trillion won.

The company cited favorable market conditions during the fourth quarter of last year, especially strong demand for server products and price hikes for mobile products.

“Last year, overall memory demand, particularly for server products, rapidly increased due to the worldwide growth of internet data centers,” the company said. “Technology migration challenges and the higher burden of capital expenditures for manufacturers have limited the growth of overall memory supply.”

Combined with Samsung Electronics’ net profit, which is scheduled to be released Wednesday, Korea’s total sales from the semiconductor industry would exceed 100 trillion won for the first time, amid a global chip boom with high demand for large-storage and high-speed chips for electronics and data centers.

Samsung’s chip division is estimated to have posted 74 trillion won in sales and 34 trillion won in operating profit in 2017.

SK hynix said that it is focusing on speeding up the completion of the new fabrication facility this year to meet growing demand for premium NAND products.

It had planned to complete the construction by the end of the year and to install equipment early next year, but decided to move forward the installation of equipment by two or three months, aiming to finish preparations for the fabrication facility’s operation within the year, Lee said.

The Wuxi plant will also be ready for operation by the end of the year.

The manufacturer said it would meet growing market demand by expanding new process technology mostly in server and SSD products.

This year, the company will expand 1Xnm DRAM -- which it had started mass producing for PCs in the fourth quarter of last year -- to mobile and server products.

SK hynix also plans to deliver new products, such as HBM2 and GDDR6, as part of efforts to broaden its portfolio.

By Song Su-hyun (song@heraldcorp.com)