Global Big Tech companies have proposed investments worth tens of trillions of won in SK hynix (000660.KS) to secure memory chips, it has been confirmed. They are seeking to invest in memory production lines, a key piece of infrastructure, to win the competition in the artificial intelligence (AI) industry.
According to industry sources Thursday, SK hynix has recently received proposals from global Big Tech companies, including investments in production lines at the Yongin semiconductor cluster and financial support to purchase ASML's extreme ultraviolet (EUV) lithography equipment.
In particular, the Big Tech firms reportedly conveyed a plan to make direct investments in the first factory (Y1), which SK hynix is building at the Yongin semiconductor cluster with a total investment of 31 trillion won.
Behind the blank checks offered by Big Tech lies an unprecedented "memory supply shortage." As investment in the AI industry expands, demand for general-purpose DRAM and high-bandwidth memory (HBM) is growing explosively. On top of this, demand for NAND flash, which stores the vast amount of data generated during AI inference, has also surged. As a result, SK hynix's first-quarter DRAM average selling price (ASP) jumped more than 60% from the previous quarter, while NAND flash rose more than 70%.
However, production capacity is insufficient to handle the surge in demand. According to SK hynix, current production capacity is effectively at "zero," and there is almost no spare volume that can be additionally allocated to specific clients.
The industry views these proposals as a strategy to gain an upper hand in long-term agreement (LTA) negotiations. SK hynix, which holds the upper hand in supply, has recently set the size of advance payments at about 30% of the total contract value. The company is also seeking contracts in which transactions take place within a predetermined lower and upper price limit, even if memory prices change sharply.
In response, the Big Tech firms are continuing negotiations by counter-proposing a method to share capital expenditure (CAPEX) with SK hynix. In exchange for being allocated dedicated production lines from SK hynix, they would cover part of the equipment purchase and facility investment costs.
SK hynix is taking a cautious stance toward Big Tech's unconventional proposals. If it builds production lines using funds from a specific client, there is a risk that it would have to prioritize allocating volume to that client even when demand declines amid changing market conditions, or supply products at below-market prices. "As we sign memory LTAs with global Big Tech companies, various discussions are emerging to bind these agreements," an SK hynix official said.
