The expanded fab (Plant 2) of SK Hynix factory in Wuxi, China will go into full operation this month. Once the 950-billion-won expansion project is completed, the plant’s production capacity will increase to 180,000 wafers per month. However, SK Hynix said that it expanded its production lines simply to introduce micro-fabrication of DRAMs, not to increase its output. This means that the chipmaker will continue to control supply volume due to a glut in semiconductor supply.
"Wafers for initial production went into the fab at the beginning of the year and this time, that volume came out," an SK Hynix official said. When equipment is installed in the future, the SK Hynix Wuxi plant will have a production capacity of 180,000 wafers of 10 nm-class DRAMs per month.
SK Hynix has secured funds to expand the Wuxi factory. On March 25, SK Hynix held a signing ceremony for a syndicate loan with a group of Chinese banks, which were led by China Development Bank and included Agricultural Bank of China, China Construction Bank, the Industrial and Commercial Bank of China and the Export-Import Bank of China. The amount of the loan was estimated at US$3.5 billion, the largest amount in the history of foreign currency loans in Jiangsu Province, China.
Prior to the full-scale operation of the Wuxi expansion fab, Park Sung-wook, vice chairman of SK Hynix, visited Wuxi on March 29 and met with Li Xiaomin, secretary of the Wuxi branch of the Communist Party. "With the completion of the second factory project, SK Hynix has invested a total of US$14 billion in the Wuxi factory," Park said at the meeting. "The relationship between Hynix and Wuxi is as strong as oak after 14 years of partnership.”
Industry watchers are paying attention to how Wuxi's expanded fab operations will impact DRAM supply and prices. According to DRAMexchange, the fixed price of a DDR4 8Gb DRAM in March dropped 11.1 percent from the previous month to US$4.56. This is close to the price of US$4.19 in December 2016, the beginning of a boom in the memory industry. Accordingly, Micron announced that it would prune production of DRAMs and NAND flashes by 5 percent each.