A Special Purpose Company Submits an Investment Letter of Intent for a Semiconductor Cluster to Yongin

Seoul, Feb 21, 2019

Yongin General Industrial Complex Inc., a special purpose company (SPC) created to build a site for a semiconductor cluster, announced on February 21st that it had submitted an Investment Letter of Intent (LOI) to the Yongin City Government on February 20th. The SPC asked for a site of about 4.48 million square meters. SK hynix Inc. (or ‘the Company’, www.skhynix.com) and more than fifty of its domestic and foreign partner companies will join the semiconductor cluster project.

Once the site is approved, the Company plans to invest 120 trillion won ($105.6 billion) to build four semiconductor fabrication plants after 2022, when the site formation is expected to be completed, at the new cluster site in Yongin. More than 50 foreign and domestic equipment/material/parts partner suppliers will also move to the new cluster, generating synergies to strengthen Korea’s semiconductor ecosystem.

About 85% of the 244 members of the Korea Semiconductor Industry Association are located in the Seoul metropolitan area. Therefore, if new cluster is built in Yongin, companies will be able to systemically cooperate in real time. Joint R&D between the chip maker and the equipment/material/parts companies, performance analysis, and equipment setup and maintenance are essential in the semiconductor industry during the entire technology development and production process.

SK hynix will provide a financial support of 1.22 trillion won for ten years in an effort to reinforce the semiconductor industry. The Company will spend 300 billion won to create a “mutual growth fund,” 638 billion won to establish an AI-based center for mutual growth and cooperation, and 280 billion for joint R&D projects.

SK hynix will continue to make investments over the next decade in its two existing campuses in Icheon, Gyeonggi Province, and Cheongju, Chungcheong Province. For Icheon, the Company will invest 20 trillion won in the new plant, M16, and a new R&D building. The Company will invest 35 trillion won in Cheongju, including the expansion of the production capacity of M15, which has been in operation since last year.

SK hynix intends to establish a triangular axis—Icheon the headquarters and a base for R&D and DRAM fabrication, Cheongju a base for NAND fabrication, and Yongin a base for DRAM and next-generation memory chips as well as for mutual growth in the industry—to pursue mid- and long-term growth.