SK Hynix, the world's second-largest memory chip maker, said it will invest 15 trillion won (NZ$18.04 billion) over the next five years to build a new chip plant in South Korea.
Construction of the facility, called M15X, will begin in October and be completed early 2025 in Cheongju, south of Seoul, SK Hynix said.
The plant will make memory chips, but whether it will be DRAM chips or NAND flash chips will be determined according to market conditions, a company spokesperson said, declining to comment on its planned capacity.
SK Hynix has DRAM production facilities in Icheon, South Korea, NAND flash chip production plants in Cheongju, as well as production plants in Wuxi, Chongqing and Dalian, China.
Its parent, SK Group, recently announced plans to build a chip packaging facility in the United States.
The move to build an American facility comes after the US looks set to crack down on memory chip production in China, leaving SK Hynix exposed.
Memory chip demand is falling as demand for gadgets drops in response to inflation, the global economic slowdown and supply chain uncertainties.
SK Hynix noted that experts forecast a recovery from 2024 and a rebound in 2025, with the cyclical nature of the business becoming less volatile compared to past years.
"The plan to build the M15X comes as SK Hynix prepares for the next upturn expected to come in 2025," it said.