SK Hynix announced that it will $12.5 billion to build the plant next to its Cheongju facility in North Chungcheong Province. Construction will start in 2018, with parts of the plant going onstream in stages after 2019.

It is not clear what will be produced on the site but it seems likely to be NAND flash memory. This would nearly double the company's total production capacity of that type of memory chip from 220,000 pieces a month in terms of wafers.

Flash memory demand is expected to surge as NAND chips replace hard-disk drives as the preferred medium for data storage at data centres and in PCs. SK Hynix ranks second by world market share for dynamic random access memory, or DRAM, but is only fifth in NAND chips. This means that it can take on Samsung, Toshiba, SanDisk and Micron in the flash memory market. Samsung plans to open a new domestic plant as early as 2017. And Chinese companies are poised to make large investments in this field.

Meanwhile the company has started mass production of cutting-edge three-dimensional NAND chips at the Cheongju plant, with shipments to begin in early April. Samsung commercialised 3-D NAND flash memory for the first time in 2013, and Toshiba intends to begin shipping such chips in March.