SK hynix (000660) is considering Japan as a memory chip production hub, following its expansion in the United States. The move is one of several options the company is weighing to meet surging artificial intelligence demand while keeping production costs in check. SK hynix is discussing not only building manufacturing facilities in Japan but also acquiring control of local companies.
SK Group Chairman Chey Tae-won told Bloomberg on the 31st at a Korea-Japan chamber of commerce meeting in Sendai that the company is looking all over Japan, and that anywhere with good access to power and water would be considered. He declined to comment on potential partners, specific sites in Japan or which products would be made there.
SK hynix is considering small acquisitions of Japanese companies or joint investments, according to Bloomberg. In a speech the same day, Chey said Korea and Japan are forming a single economic bloc together, and that the two countries can not only cooperate but also complement each other.
NAND flash memory, along with high-bandwidth memory (HBM), has seen demand surge. Deep-pocketed companies such as Meta and Amazon are competing to secure more storage capacity that is faster than traditional hard disk drives. SK hynix is scouting production sites at home and abroad to meet that demand. The company has drawn up plans to spend $39 billion, or about 53 trillion won, expanding domestic chip manufacturing facilities, and is building an advanced memory packaging plant in West Lafayette, Indiana. It held a groundbreaking ceremony for the Indiana packaging facility last week.
The company is exploring production sites in Japan to broaden cooperation with Japanese customers and suppliers. SK hynix is effectively the largest shareholder in Kioxia, the Tokyo-based NAND flash producer. SK hynix Chief Executive Kwak Noh-jung said recently that the company is carefully examining how to jointly develop the NAND flash market with customers and suppliers.
SK hynix has suppliers in Japan ranging from Namics to chip equipment powerhouse Tokyo Electron, as well as customers such as Sony and Nintendo. Rival Micron operates a plant in Hiroshima in western Japan. Japan's government also plans to provide large subsidies to foreign chipmakers that expand domestic production capacity, as it has done for Taiwan's TSMC, another factor drawing SK hynix's interest.
