SK hynix to invest W6tr despite market uncertainty

2016-01-14 18:16

Aiming to counter tumbling demand for chips due mainly to the saturated global smartphone and PC chip markets, SK hynix announced Thursday a plan to invest 6 trillion won ($4.95 billion) this year.

The company will match last year’s investment to conduct research and development for new chip technology, acquire a competitive edge in price, and build new production lines, according to the firm.

The logo of SK hynix is on a company office window. (Yonhap)

Specifically, the company will speed up the development of the 2z- and 1x-nanometer DRAM and three-dimensional NAND Flash memory chips. The letters x and y indicate high- and low-single digits while y stands for a mid-single digit.

The investment plan is in line with SK hynix’s initiative announced last year to earmark around 46 trillion won of funds by 2024 to beef up manufacturing facilities at its three factories in the nation, including the M14 in Icheon, Gyeonggi Province.

The investment, which the chip company plans to spend by 2021 for the M14 alone, is expected to fuel production worth 55 trillion won while creating 210,000 jobs, the company said, citing a report by Seoul National University’s Institute of Economic Research.

SK Group chairman Chey Tae-won, who returned to top management after a presidential pardon last year, is said to have made the latest investment decision.

Since acquiring SK hynix in 2012, chairman Chey has paid keen attention to the chip business affiliate.

Upon the acquisition, SK Group increased investment for the firm’s manufacturing infrastructure by more than 10 percent compared to the preceding year.

SK hynix’s revenue, as a result, reached peak levels in 2013 and 2014, at 14.2 trillion won and 17.1 trillion won, respectively. The company is scheduled to announce the 2015 earnings on Jan. 26.

The Seoul-headquartered company is the second-largest DRAM manufacturer with its third-quarter market share last year standing at 27.6 percent, following Samsung Electronics, according to market research firm IHS.

In terms of wafer capacity, SK hynix took the fifth spot with its capacity of 1.3 million 200 mm-equivalent wafers per month, according to an IC Insights report.

By Kim Young-won (