SK Hynix Earmarks $26 Billion for Capacity Expansion

With the many stories about SSD price parity and the ever increasing size of SSDs, one imagines that NAND production will have to increase dramatically to fuel such gains. This is just the case as SK Hynix just announced plans to spend $26 billion to build 2 new semiconductor manufacturing facilities. This investment comes on top of an already large $13 billion investment in the new M14 DRAM facility set to come online in 2017. SK Hynix is expecting the two new facilities to be operational by 2024.

Even with such large investment from SK Hynix and competitors like Samsung, SanDisk/Toshiba and IMFT, analysts are not predicting a sharp drop in DRAM or NAND prices. On one hand, there is the fact that the few players aren’t keen to enter into a destructive race to the bottom just yet as along as their marketshare remains stable. It’s only once the NAND and DRAM markets stop growing will we see a massive price war start up. Given the increasing adoption of both mobile computing devices and SSDs in general, that is unlikely to happen anytime soon. Even without a massive price drop, NAND and DRAM prices should continue to fall as manufacturers transition to 3D NAND and ever lower processes. The biggest question is if 3D Xpoint will revolutionize the industry or not.

Thank you Reuters for providing us with this information