SK Hynix, the world's second-largest producer of memory chips, announced on Friday that it will be investing approximately 9.4 trillion won ($6.8 billion) in its inaugural chip facility located in Yongin, South Korea.

The Nvidia supplier, which recently disclosed its strongest earnings performance since 2018 and highlighted the increasing demand for AI chips, has been strategizing this investment initiative since 2019 for the establishment of four additional chip plants within a semiconductor hub near Seoul.

“The Yongin cluster will be the foundation for SK Hynix’s mid- to long-term growth,” said Kim Young-sik, the firm’s head of manufacturing technology.

SK Hynix stated in a regulatory filing that the investment is intended to address the increasing demand for AI semiconductors and ensure future growth.

The company also mentioned in a statement that the vast 4.2 million sq. m. site will eventually accommodate four planned chip plants that will manufacture next-generation semiconductors, along with over 50 small local firms in the chip industry.

The funds allocated for Friday are anticipated to cover the construction of the first plant until the end of 2028, including utilities like water and electricity, as well as business support and welfare facilities.

Additionally, the site will feature a "mini-fab" research facility capable of processing 300-mm silicon wafers, enabling domestic chip materials and equipment manufacturers to test their products in a practical environment.

This announcement comes after the company's previous plan, revealed in April, to invest approximately $3.87 billion in an advanced packaging plant and research and development facility for AI products in the state of Indiana, USA.