SK Hynix has begun construction of a nearly $13 billion advanced packaging facility in South Korea. This major investment highlights the memory chip sector’s growth, fueled by AI. However, if supply from new facilities grows faster than demand, Micron Technology investors could face risks from future market oversaturation, which could pressure prices and profits.

The new facility at SK Hynix’s Cheongju complex will make high-bandwidth memory chips. These specialized chips are now essential for AI accelerator hardware and have pushed memory chip prices higher across the industry. The plant plans to start test operations in October 2027 and begin full packaging production by February 2028.

Substantial capacity expansions are planned: Micron’s Idaho output is undergoing several major capacity expansions. Micron’s Idaho facility is expected to start output in mid-2026, SK Hynix’s Yongin plant in late 2027, and Micron’s New York site by 2030. These projects will start increasing supply from mid-2026, then overbuild during demand upswings, and finally trigger price collapses as new capacity floods the market. Current demand for HBM and conventional DRAM is expected to exceed available supply through at least mid-2026, providing a near-term pricing floor that continues to support revenue and margin expansion for both SK Hynix and Micron.

KeyBanc maintains an Overweight rating on Micron, citing expectations that DRAM and NAND prices will continue rising moderately as supply remains tight through at least 2027. The firm sees the current supply supporting strong pricing power despite industry investment.