From the linked article:
South Korean chipmaker SK Hynix has indefinitely postponed plans for a 4.3 trillion won ($3.3 billion) expansion of a memory chip plant, it was learned Wednesday, amid rising costs and concerns about a protracted slump in demand.
The world’s second-largest manufacturer of memory chips was slated to break ground on the new 430,000-sq.-meter M17 fabrication facility at its Cheongju campus in 2023, with production to begin in 2025. SK Hynix makes NAND flash memory at the Cheongju site, and the planned factory had been expected to mass-produce advanced memory chips.
SK Hynix’s board shelved the project at a recent meeting, according to a supplier. Inventories have been rising due to China’s coronavirus lockdowns and sluggish sales of smartphones and personal computers. Executives, expecting the lull to last for another year or two, apparently decided to hold off on investing for now.
This is good news for Micron shareholders. It would be better if it were the delay of a DRAM fab, because NAND is 30% of Micron’s revenue while DRAM is 70%. The fab expansion wouldn’t produce wafers until 2025 so this won’t have an effect on supply in this cycle, but it is a signal to the other manufacturers that Hynix is more interested in price stability than in gaining market share. Pushing out this expansion will also reduce Hynix’s capital expenditures next year, thus increasing their free cash flow during a period when pricing may still be soft.
Link to article: https://asia.nikkei.com/Business/Tech/Semiconductors/SK-Hyni…
-S. Hughes (long MU)