SK hynix weighs joint memory plant in Japan as part of overseas expansion efforts

SK hynix is reviewing plans to build a joint memory chip plant in Japan as the company looks to expand overseas production due to surging AI-driven demand for memory chips, SK Group Chairman Chey Tae-won said on Monday.

“We are looking all over Japan,” Chey told Bloomberg on the sidelines of a meeting between members of Korea’s and Japan’s chamber of commerce in Sendai, Japan. “Anywhere with good power and good water.”

When pressed for a comment, he did not elaborate on potential partners, specific locations or what products would be made.

The Korean chipmaker itself has yet to announce a potential deal. Instead, it stated via a regulatory disclosure on Aug. 21 that nothing has been finalized regarding multiple reports that it plans to build a semiconductor plant in Miyagi Prefecture in Japan with an investment of tens of trillions of won.

“Our stance remains the same as before [Chey’s comment],” an SK hynix spokesperson told the Korea JoongAng Daily. “We are still deliberating multiple options to expand our production sites overseas.” 

Chey, who also serves as chairman of the Korea Chamber of Commerce & Industry, said that “now is the time for Korea and Japan to form an economic bloc” at an event on the two countries’ shrinking labor populations ahead of the annual Korea-Japan chamber meeting.

SK, including memory chipmaker affiliate SK hynix, operates various businesses spanning energy, chemicals, telecom and biopharmaceuticals and makes group-level decisions on capital allocation for major investments.

Bloomberg noted that the exploration is part of SK’s effort to strengthen partnerships with Japanese clients and partner companies, scout production sites worldwide to meet AI’s explosive demand for data storage and respond to U.S. efforts to curb China’s technological ambitions.

Reports about SK considering building memory chip plants in Japan have resurfaced throughout the year. Chey publicly named Japan as a potential production base in a separate interview with Nikkei Asia in June, calling the country an “excellent candidate.”

SK hynix holds more than a 14 percent stake in Japanese flash memory maker Kioxia through a Bain Capital special purpose company.

SK hynix CEO Kwak Noh-jung said last week that the company is carefully reviewing ways to jointly develop the NAND flash memory market together with customers and partners.

SK hynix’s partners in Japan range from unlisted firm Namics to major chip equipment maker Tokyo Electron, and its customers include Sony Group and Nintendo. U.S. chipmaker Micron Technology also operates a plant in Hiroshima, Japan.

The Japanese government has actively subsidized capacity expansion projects in Japan by overseas semiconductor makers such as Taiwan’s TSMC.

SK hynix held a groundbreaking ceremony on Thursday for its next-generation high bandwidth memory, or HBM, advanced packaging plant in West Lafayette, Indiana.

The company is also exploring additional ways to expand into overseas markets and plans to invest 54 trillion won ($39 billion) to grow its semiconductor production facilities in Korea.

BY LEE JAE-LIM [[email protected]]