SK Hynix Stock Falls 15% as $64 Billion Chip Investment Plan Unveiled

TLDR

• SK Hynix announced a 100 trillion won ($64.4 billion) investment to build new NAND flash and chip packaging plants in Cheongju, South Korea.
• The NAND factory (M17) will cost 80 trillion won and is targeted for completion by 2029, with a 20 trillion won packaging plant due by late 2027.
• The plan is part of a broader $2.1 trillion semiconductor investment drive shared with Samsung, aimed at doubling South Korea’s memory chip capacity within five years.
• SK Hynix stock fell 15% and Samsung dropped 9% on Thursday, hit by a global chip selloff linked to concerns over Meta’s cloud computing plans.
• Michael Burry publicly warned about the scale of AI investment, calling it “the beginning of the end” in a subscriber newsletter.

SK Hynix stock closed down 15% on Thursday as the South Korean chipmaker detailed one of the largest semiconductor investment plans in the country’s history.

The company confirmed it will spend 100 trillion won ($64.4 billion) on new chip manufacturing facilities in Cheongju, South Korea. CEO Kwak Noh-jung made the announcement at an event attended by South Korean President Lee Jae Myung.

The bulk of the spend — 80 trillion won — goes toward a new NAND flash memory factory called M17, with a 2029 completion target. Another 20 trillion won is earmarked for a chip packaging plant due by late 2027. Construction on M17 is set to begin next year.

The Cheongju plan is part of a broader $2.1 trillion investment programme announced this week alongside Samsung Electronics. The wider initiative includes a new chip cluster in southwest South Korea and various existing projects. South Korea is aiming to double its memory chip production capacity within five years.

Why Stocks Fell

Despite the bullish investment tone, SK Hynix and Samsung both sold off hard. SK Hynix ended down 15%, Samsung fell 9%, and the broader KOSPI index dropped around 7.2%.

The selloff was triggered by news around Meta Platforms’ plans to sell computing power, which raised questions about whether AI infrastructure spending has peaked. Investors reacted by pulling back from chip stocks globally.

In April, SK Hynix had already broken ground on a separate advanced packaging facility in Cheongju for AI memory, including high-bandwidth memory chips. That facility is focused on meeting near-term AI demand.

SK Hynix did flag some caution in a regulatory filing this week. The company said long-term investment plans could change depending on global chip demand and customer spending patterns. Site selection delays could also push back timelines.

Burry Sounds the Alarm

Investor Michael Burry, known for his 2008 housing market bet featured in The Big Short, publicly questioned the scale of AI investment in a subscriber newsletter reported by the Wall Street Journal.

SK Hynix, Samsung, and Micron are the world’s three largest memory chip makers. Prices for both NAND flash and DRAM have hit historical highs as AI hyperscalers drive demand across all memory types.

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