SK Hynix invests $10 million in expanding foundry business when memory and flash memory keep growing

SK Hynix is the second largest DRAM chips supplier, who only ranks behind Samsung with 30% global market shares. It is also one of global major NAND suppliers. Due to increasing of memory and flash memory chips business, SK Hynix will replace TSMC to become the world’s third largest semiconductor manufacturer, after Samsung and Intel. However, DRAM and NAND flash memory chips prices will continue to fall in 2019, SK Hynix who relies on memory chip sets up SK Hynix System IC in last year, and begins its foundry business. SK Hynix will add $10 million investment and broaden the analog integrated circuits business in Wuxi China, South Korean Media reproted.

    SK Hynix deals with Wuxi Industrial Development Group through its subsidiary corporation, SK Hynix System IC(SHSI for short) in July this year. The latter contributes $3.5 hundred million to set up a joint venture with SHSI, having a stake of 49.9% and SHSI has a stack of 50.1%. They will build a 200mm wafer fab in Wuxi. SK Hynix will move its M8 fab to Wuxi China, which is in Cheongju 130 kilometres away from Seoul, South Korea. Its construction is predicted to finish in 2019.

    Compared with 300mm wafer fabs, the joint-stock 200mm fab doesn’t appear very advanced. But SK Hynix’s foundry is focusing on analog integrated circuits, such as sensor, power management IC and so on. 200mm wafer fab is advanced enough in production. 

    There is no specific purpose of $10 million invested by SK Hynix earlier, it depends on the fab’s construction.

    SK Hynix’s memory and flash memory chips are very famous, but its foundry business is just starting out. The revenue of SK Hyinx System IC is $2.6 hundred million, which shares 0.4% of global wafer market and is ranked 24th far away from first several foundries. As a result, SK Hynix starts to add investment, enlarge foundry business, diffuse its businesses, and reduce the impact of future price reduction of memory and flash memory.

    The core investment of SK Hynix is Wuxi China. The construction of SK Hynix’s DRAM fabs has lasted 13 years since 2005, its investment in Wuxi is more than $11 billion in total. Besides memory and foundry fab, SK Hynix also announced it would invest $3 hundred million to build a general hospital in Wuxi.