SK Hynix to boost investments in new NAND chip plant

The hike in 29% unplanned investment is due to rising cost of equipment.

In a development that underscores a potential increase in demand for memory chips, SK Hynix Inc stated it would invest $17.8 billion (20 trillion won) in a new memory chip manufacturing plant which will open on Thursday in South Korea; the amount is 29% more than its original estimated budget amount.

In 2015, SK Hynix had said, it would invest 15.5 trillion won make chips smaller.

The cost escalation is due to rising costs of equipment.

The new plant will produce NAND flash chips.

“Timing for equipment installation shall be decided considering market conditions,” said SK Hynix in a statement.

According to data from market trackers, prices for NAND chips have dropped by 50% due to oversupplies. Analysts opine, the drop is expected to accelerate and will also drag down DRAM prices as well.

According to an official from SK Hynix, the chipmaker had already spent around 2.2 trillion won on the plant.


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