SK Hynix approves $38B chip fab expansion, lifting Micron shares

Shares of Micron Technology ↗ 0.68% rose in premarket trading on Friday after South Korean chipmaker SK Hynix ↘ 2.01% announced its board had approved approximately 54.3 trillion won ($38.3 billion) in investments to build new semiconductor fabrication plants, a move that lifted sentiment across the memory chip sector.

Micron shares gained roughly 1.3% in premarket activity, according to MarketWatch data, recovering from a steep decline in Thursday's session. The broader technology sector provided a tailwind, with Nasdaq futures climbing in early trading.blockonomi+1

SK Hynix's Expansion Plans

SK Hynix, the world's second-largest memory chip maker, said the investment would fund two major projects through 2031: 35.2 trillion won for the second phase of its DRAM fabrication plant in Yongin, south of Seoul, and 19.1 trillion won for a new NAND memory plant, designated M17, in Cheongju in central South Korea, according to Reuters. Construction at both sites is slated to begin next year, with the first cleanroom at Yongin expected to open in June 2029 for production of high-bandwidth memory and other advanced DRAM products.mezha+1

The announcement follows an even larger commitment disclosed in June, when SK Hynix said it planned to invest 600 trillion won in the Yongin semiconductor cluster and 100 trillion won to expand its Cheongju base, though it deferred detailed plans pending board approval. SK Hynix and Samsung Electronics had also jointly outlined plans for combined spending of roughly 800 trillion won on new semiconductor hubs in southwestern Korea.reuters+1

Despite the bullish long-term signal, SK Hynix shares fell 4.9% during Friday trading in Seoul, and its American depositary receipts slipped in U.S. premarket hours.blockonomi+1

What It Means for Micron

For Micron investors, the key takeaway is timing. New memory chip capacity takes years to come online. Micron's own $100 billion fabrication complex in New York, announced in 2022, is not expected to begin operations until 2030. Industry observers do not anticipate substantial new memory production capacity becoming operational for at least another year, with additional facilities planned for 2028.blockonomi+1

That extended supply timeline continues to underpin the bullish case for memory stocks, particularly as demand for AI-related hardware — the driving force behind SK Hynix's expansion, which the company attributed to "the continuously growing demand for memory in the AI era" — shows no signs of slowing.bloomberg