SK Hynix memory factory in Wuxi will put into operation in April: capacity to increase, memory prices increaing to be difficult
The Q2 quarterly earnings for fiscal 2019 released by Micron recently, showed that the average price of ASP for memory and flash memory fell by 20% annually, resulting in a sharp drop of 26% in revenue and a 50% plunge in profits, so that Micron decided to cut its flash memory and memory capacity by 5% in the hope that the memory prices would return to normal by the end of this year. Samsung also issued an early warning for Q1 quarterly earnings, which is also related to falling profits caused by the reduction of memory prices. For memory, the market expects that the prices will decline until Q3 quarter, mainly because of oversupply. And for memory manufacturers, It's not easy to raise prices this year, because DRAM memory plant where SK Hynix has invested $8.6 billion in Wuxi will be put into operation in April this year. Since then, SK Hynix's memory capacity in Wuxi will rise to 180,000 wafers per month, which will lead to a huge increase in production capacity and a more serious oversupply in the market.
It is reported that this is the largest single foreign exchange syndicated loan project in the history of Jiangsu Province. And the leading bank, China Development Bank, is a policy bank directly under the leadership of the State Council and the main financing bank in Wuxi to build China Microelectronics South Base, and it has provided syndicated loan services to Hailishi for three consecutive times as a leading bank.
SK Helix is the largest foreign-investment enterprise with single investment in Jiangsu province, which was officially settled in Wuxi in 2005, and has cooperated with the syndicate many times before. In June 2017, SK Hailishi II Factory project officially started, with a total investment of 8.6 billion dollars. At present, the first phase of the project has entered the final stage of mechanical and electrical installation, and is scheduled to be completed and put into operation in April this year.
After the completion of II Factory project, SK Hailishi Wuxi Factory will become a large-scale semiconductor manufacturing base with 180,000 ten-nanometer wafers per month.