SK Hynix will hold a completion ceremony for its M15 semiconductor plant in Cheongju, North Chungcheong Province, on October 4 and start producing fifth-generation 96-layer 3D NAND flash chips. This will further solidify its position as the world’s second-largest memory semiconductor manufacturer.
The company invested 15 trillion won (US$13.5 billion) in M15, which will produce fourth-generation 72-layer NAND flash chips before churning out the 96-layer NAND flash chips from early next year. The latter is currently the most advanced 3D NAND technology, in which 96 cells as minimum data storage units are stacked for a 30% to 40% improvement in speed, capacity and power consumption as compared with the former.
The completion of M15 has two significant meanings. The new plant is likely to help SK Hynix respond more actively to the global NAND flash market, which is growing rapidly amid Industry 4.0. At present, SK Hynix ranks fourth or fifth in the market. The company is expected to be able to narrow its gap with leaders such as Samsung Electronics and Toshiba by manufacturing 96-layer chips.
The reliance of SK Hynix on DRAMs can be reduced, too. In the second quarter of this year, the company ranked second in the global DRAM market with a market share of 29.6% yet fourth in the NAND flash market with 11.1%. Last year, DRAM accounted for 90% of the company’s operating profit.
With global NAND flash demands on the rise, memory chip manufacturers are increasing their investments in NAND flash. For example, Samsung Electronics is building its second NAND flash manufacturing plant in Xian, China by investing US$7 billion. Samsung Electronics is going to produce 48- and 64-layer NAND flash chips there from late next year. Toshiba recently built a similar plant in Japan. YMTC, which recently completed 32-layer NAND flash development, is planning to manufacture the item from late this year.
“The global NAND flash demands will keep rising for a while based on the development of artificial intelligence, cloud computing and data centers,” said an industry insider, adding, “This is why SK Hynix is about to put its new facility into operation eight months ahead of schedule.”
The 96-layer chips to be produced in M15 can be a tool for SK Hynix to stay ahead of Chinese rivals. At present, South Korean, American and Japanese memory semiconductor companies are competing fiercely to produce the chips ahead of the others. Toshiba began to work on the technology with Western Digital in June last year and recently started production. Micron Technology is planning to complete development within this year in cooperation with Intel. Samsung Electronics began to supply 90-layer chips in May this year.
A successful operation of M15 can improve the business structure of SK Hynix. “When it comes to Samsung Electronics, DRAM and NAND account for 60% and 40%, respectively,” said an industry source, continuing, “Earlier, SK Hynix decided to invest no less than four trillion won (US$3.6 billion) in Toshiba, and the investment decision was to reduce its reliance on DRAMs.”