SEOUL -- SK Hynix will build a new memory chip plant by 2025, joining an investment race driven by growing demand for semiconductors used at data centers and in personal computers.

     The South Korean chipmaker said Monday it plans to invest up to 15.5 trillion won ($12.5 billion) to build the plant next to its Cheongju facility in North Chungcheong Province. The company has secured a 250,000-sq.-meter plot and exchanged a memorandum of understanding with the Cheongju city government. Construction is to start in 2018, with parts of the plant going onstream in stages from 2019, sources close to SK Hynix said.

     The exact items to be produced have yet to be decided, but an SK Hynix official said the new plant likely will make NAND flash memory. Devoting the plant entirely to NAND chip fabrication would nearly double the company's total production capacity of that type of memory chip from 220,000 pieces a month in terms of wafers used.

     Projections suggest that flash memory demand will surge as NAND chips replace hard-disk drives as the preferred medium for data storage at data centers and in PCs, even though memory chip prices have declined recently due to sluggish growth in the smartphone market.

     SK Hynix ranks second by world market share for dynamic random access memory, or DRAM, but is No. 5 in NAND chips. With the new plant, it looks to close in on compatriot Samsung Electronics, Japan's Toshiba and U.S. concerns SanDisk and Micron Technology in the flash memory market.

     A race to boost output of flash memory appears to be heating up again. Intel of the U.S. is expanding a facility in China while Samsung plans to open a new domestic plant as early as 2017. And Chinese companies are poised to make large investments in this field.

     SK Hynix also said it has started mass production of cutting-edge three-dimensional NAND chips at the Cheongju plant, with shipments to begin in early April. This technology of stacking thin layers of memory elements leads to larger capacities and lower power consumption. Samsung commercialized 3-D NAND flash memory for the first time in the world in 2013, and Toshiba intends to begin shipping such chips in March.


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