SK Hynix studies Japan joint venture for memory fab amid AI shortage

SK Hynix ↘ 0.79% is studying the feasibility of building a memory chip manufacturing facility in Japan, as the South Korean chipmaker moves to expand production beyond its home base amid a global memory shortage driven by artificial intelligence demand.

Bloomberg reported on August 31 that the company is evaluating a potential joint venture to make memory chips in Japan, with Miyagi Prefecture identified as a possible site. SK Hynix said no decision has been finalized but that "any location with the necessary infrastructure could be a potential candidate," according to Reuters. SK Group Chairman Chey Tae-won told Nikkei in June that Japan was an attractive option because it already has the equipment, materials, and power supply that chipmaking requires.startupfortune+3

If the project moves forward, it would mark the first major memory production base in Japan by a South Korean semiconductor company.kedglobal

A Shortage With No End in Sight

The Japan search comes as SK Hynix CEO Kwak Noh-jung has warned that the memory industry faces its worst-ever supply crunch. In July, Kwak told Reuters that 2027 would be the tightest year in memory supply history and that demand would outstrip supply beyond 2030. He reiterated at the company's August 27 groundbreaking ceremony in West Lafayette, Indiana, that he sees no clear signs of oversupply through the end of the decade.sammyfans+2

SK Hynix's board approved roughly 54.3 trillion won, about $38 billion, on August 7 for new fabs in Yongin and Cheongju, South Korea. Days later, the company broke ground on a more than $4 billion advanced packaging and R&D facility near Purdue University in Indiana, its first high-bandwidth memory production hub in the United States, with output expected from the second half of 2029.news.skhynix+2

The Kioxia Connection

Japan is not unfamiliar ground for SK Hynix. The company participated in the Bain Capital-led acquisition of Toshiba Memory, now Kioxia, in 2018 and holds convertible bonds linked to the Bain investment vehicle's voting rights in Kioxia. Kioxia and Western Digital's ↘ 1.63% SanDisk unit are planning more than $31 billion in Japanese memory investment through 2032, according to The Wall Street Journal News Corp ↗ 0.90%.startupfortune

At the Indiana ceremony, Kwak said SK Hynix had no fixed plan for its Kioxia stake but was exploring ways to develop the NAND flash market alongside customers and suppliers. Samsung Electronics, the world's largest memory maker, has separately warned that the memory shortage could deepen through 2028. With all three major producers — Samsung, SK Hynix, and Micron Technology ↗ 0.22% — already selling out future capacity years in advance, the search for new factory sites is less about strategy than arithmetic.kedglobal+2