SK hynix Expands Chip Packaging Capacity with New Back-End Plant in South Korea | Advanced Semiconductor Packaging News

SK hynix Inc. is accelerating its presence in the advanced chip packaging sector with a newly planned semiconductor back-end process plant in Cheongju, South Korea. The project involves demolishing an existing structure at its Cheongju factory—approximately 110 kilometers south of Seoul—to make way for the new facility, tentatively named “Package & Test (P&T) 7.” The demolition is expected to be completed by September 2025.

Once completed, P&T 7 will become the seventh such facility operated by SK hynix, adding to its back-end production capacity in both South Korea and China. These plants specialize in semiconductor back-end processes, which include chip packaging and testing—critical steps in preparing processed wafers into fully functional, market-ready products.

While the exact function of P&T 7 is still under review, industry experts expect it to support high-performance packaging technologies, particularly in response to growing demand for AI chips and high-bandwidth memory (HBM).

This investment comes at a pivotal time. As traditional performance gains via chip miniaturization become harder and more expensive, global semiconductor manufacturers are shifting focus toward advanced packaging technologies. According to industry forecasts, the semiconductor back-end equipment market is projected to grow from $113 billion in 2025 to $157.7 billion by 2030, with a CAGR of 6.89%.

For memory chip makers, advanced packaging is crucial—especially in the HBM space, where stacking DRAM dies presents challenges such as heat dissipation and substrate warping. The ability to deliver robust, thermally efficient packaging has become a key differentiator in the AI-driven data center market.

With the global semiconductor market expected to reach $697 billion in 2025, and AI memory technologies representing a major growth driver, SK hynix’s expanded packaging capabilities align closely with evolving customer needs.

This move is also part of SK hynix’s long-term transformation strategy, initiated after SK Group’s acquisition of a 20.5% stake in 2012, which has repositioned the company from a traditional memory manufacturer to a global innovation leader in semiconductor technologies.

Moreover, by locating the new facility in South Korea, SK hynix reinforces the strategic importance of secure, domestic semiconductor production, addressing growing concerns around supply chain stability and national semiconductor resilience.