'DRAM Outpost' 160 Trillion Won Master Plan... Step-by-Step Roadmap for SK hynix's Yongin Fab [Chip Talk]

31 Trillion Won Spent on Phase 1 Structure Alone
160 Trillion Won Needed for Internal Facilities
First Cleanroom Expected to Be Used for 'DRAM'

SK hynix has decided to invest an additional 21.6 trillion won in the Phase 1 fab of the Yongin Cluster. With this, a total of approximately 31 trillion won will be invested solely in the framework construction of Phase 1. It is expected that about 160 trillion won will be invested by 2030 to complete the remaining framework construction, build six cleanrooms, and install internal facilities.

According to SK hynix on February 28, the company has completed the first stage of framework construction for the Phase 1 fab in the Yongin Cluster and plans to complete the remaining framework construction and five additional cleanrooms (Phases 2 to 6) by 2030. Since the massive semiconductor fab, equivalent to a 50-story apartment building and spanning a total area of 4.15 million square meters (approximately 1.26 million pyeong), will be constructed, the fab will be divided into two sections (left and right) and construction will proceed sequentially.

Yongin Cluster Phase 1 Fab Layout. SK Hynix.

Accordingly, the investments have also been carried out sequentially. Previously, in July 2024, the company decided to inject around 9.4 trillion won for the initial construction of the Phase 1 fab, auxiliary facilities, welfare facilities, and the construction of Phase 1. Subsequently, an additional 21.6 trillion won was allocated to carry out the second-phase framework construction, which includes Phases 2 to 6.

The company has moved up the opening date of the first cleanroom (Phase 1) from May next year to February. This is interpreted as a move to rapidly expand production capacity amid the explosive growth in demand for artificial intelligence (AI).

Yongin Cluster Phase 1 Fab Layout. SK hynix.

It is highly likely that DRAM production facilities will be installed in the first cleanroom. This is because SK hynix's core competitiveness is concentrated in DRAM, especially high-bandwidth memory (HBM) for AI servers. Industry observers believe that subsequent cleanrooms are also highly likely to be filled with DRAM production lines. This is due to the expectation that global investment in AI infrastructure will continue for the time being, and that the structural demand for high-performance memory will grow significantly as generative AI advances and data centers are expanded. Accordingly, there is also speculation that SK hynix may configure the cleanrooms in the Phase 1 Yongin fab mainly for DRAM and gradually expand its production capacity.

Another 150 Trillion Won Needed for Phase 1 Fab Alone... Over 600 Trillion Won for All Four Phases

In order to fully equip all facilities, including six cleanrooms, a total of about 160 trillion won will be required. The 31 trillion won invested so far only covers the framework construction costs for the Phase 1 fab. Including internal facilities and production costs, an additional 130 trillion won or so is needed. Considering that a total of four fabs are planned for the Yongin Cluster, the total required investment exceeds 600 trillion won. This is about five times higher than the initial estimate of 120 trillion won announced in 2019, reflecting a significant increase over six years.

Chey Tae-won, Chairman of SK Group, stated last year at the Yongsan Presidential Office that "investment in the Yongin semiconductor fab alone will reach about 600 trillion won," and explained that the investment scope would be determined according to market demand.

This increase was driven by factors such as the expansion of cleanroom floor area due to an increase in the floor area ratio, rising construction costs, and an increase in state-of-the-art process equipment. In fact, the floor area ratio of the SK hynix site was significantly raised from 350% to 490%, and the maximum building height was eased from 120 meters to 150 meters. According to the company, construction costs have increased by 1.4 times compared to the 2019 announcement, the number of pieces of equipment introduced has risen due to the expanded cleanroom area, and equipment costs have surged significantly as more advanced processes are adopted.

Lee Eog-weon, Chairman of the Financial Services Commission, is attending the "National Growth Fund Strategy Committee Meeting" held at the Industrial Bank of Korea in Yeouido, Seoul on December 11 last year, delivering a keynote speech. Photo by Yoon Dong-ju

SK hynix is currently deliberating ways to secure funding. In this context, the possibility of support from the "National Growth Fund," established by the government to foster advanced strategic industries, is being discussed. The first investment destination was selected as the Shinan-Uui Offshore Wind Power Project, and the plan to provide low-interest loans to the Samsung Electronics Pyeongtaek Line 5 AI semiconductor cluster and the Ulsan next-generation secondary battery material plant project was also approved. The Yongin Cluster project is also being considered as a candidate for the next round of support.

The government's move to ease holding company regulations is also emerging as a means of securing resources. The government has announced its intention to lower the mandatory shareholding ratio for grandchild companies of general holding companies establishing great-grandchild companies from the current 100% to more than 50%. Previously, under the Fair Trade Act, a grandchild company of a holding company was required to own 100% of a great-grandchild company, making it impossible to attract external capital to establish subsidiaries. If a grandchild company establishes a subsidiary, it could become a special purpose investment entity for a specific project. The industry expects that SK hynix will benefit from this government decision. As SK hynix is a grandchild company of SK Inc., the regulatory relaxation will allow it to form a special purpose company (SPC) for fab construction and attract investment.

This content was produced with the assistance of AI translation services.