In response to chip shortages driven by the artificial intelligence boom, SK hynix has announced a significant investment plan. The company stated on Thursday its intention to invest 80 trillion won (approximately $514.6 billion) to construct a new NAND flash memory wafer fab in Cheongju, South Chungcheong Province, South Korea.

This facility, to be named M17, is scheduled to commence operations in 2029. Additionally, SK hynix plans to invest a further 20 trillion won to build a new chip packaging plant in Cheongju by the end of 2027. These plans were unveiled by the company at a recent event.

CEO Kwak Noh-Jung of SK hynix stated, "We will invest 80 trillion won to build the new NAND wafer fab M17 in Cheongju, and 20 trillion won to construct the advanced packaging plant P&T7. Combined with a 1GW-class AI data center, our total investment in the Chungcheong region will reach 170 trillion won."

This announcement coincides with a major industrial investment initiative for the region. On Thursday, South Korea's Ministry of Trade, Industry and Energy declared that it will inject 392 trillion won (around $2.525 trillion) in industrial investment into the central Chungcheong area.

Within this total, various Samsung subsidiaries are set to contribute approximately 140 trillion won for projects including HBM wafer fabs, advanced packaging, OLED production, and battery lines. SK hynix plans to invest about 100 trillion won for its NAND and advanced packaging facilities. Biopharmaceutical firm Celltrion intends to allocate around 2 trillion won for biopharmaceutical facilities.

A further 150 trillion won is earmarked for AI data centers. An official from the ministry commented, "The Chungcheong region has long been a transportation hub where population, technology, and industry converge. The advancement of industries in this region will drive the overall industrial development of South Korea."

This news comes as South Korean stocks faced a sharp downturn. On Thursday, the benchmark KOSPI index fell by nearly 7% at one point, with heavyweight constituents Samsung Electronics and SK hynix both declining over 7%.

The sell-off was triggered by concerns over potential AI computing power oversupply, following reports that Meta Platforms planned to sell computing capacity. This led to a broad sell-off in chipmaker stocks, with companies like Micron Technology and SanDisk experiencing significant drops of around 10%.