SK Hynix Expands Practical Investments to Enhance Competitiveness

China Invests 3 Trillion Won in Semiconductor Production Facility in Wuxi Peninsula

SK Hynix Cheongju Plant 3 exterior view.

[Asia Economy Reporter Dongwoo Lee] SK Hynix is making practical investments to enhance competitiveness amid growing global economic uncertainties such as the spread of the novel coronavirus disease (COVID-19).

According to the industry on the 5th, SK Hynix recently invested 3.2999 trillion KRW in its semiconductor production facility in Wuxi, Jiangsu Province, China. SK Hynix explained, "The funds are being lent to secure the investment resources necessary to supplement the Wuxi production facility."

The industry expects the memory market recovery trend to continue and anticipates that SK Hynix will be able to additionally secure a production scale of about 30,000 12-inch wafers per month through this supplementary investment.

The fund recently invested by SK Hynix created a special purpose company (SPC) and also acquired the foundry (semiconductor contract manufacturing) division of MagnaChip Semiconductor. The acquisition amount is approximately 344.7 million USD (about 420 billion KRW). The sale process is expected to be completed as early as August.

MagnaChip Semiconductor is known as the world's number one supplier of organic light-emitting diode (OLED) display driver chips on a non-captive basis, without owning panel manufacturing facilities.

The industry judged that although SK Hynix will not directly participate in the management of the newly established corporation through this acquisition, cooperation in semiconductor production technology may be possible.

An industry official said, "It appears to be an investment to carefully monitor the growth of the 8-inch (200mm) foundry business, which has been experiencing increasing demand recently."