SK Hynix to build power plants for chip factories

SK Hynix will invest 1.7 trillion won ($1.5 billion) in LNG power plants in Icheon, Gyeonggi and Cheongju, North Chungcheong, to ensure stable electricity supply for its chip plants in the two regions.

The announcement was made public in a regulatory filing Monday. The construction of the two power plants in Icheon and Cheongju, collectively dubbed the “Smart Energy Center,” will take place between 2020 and 2022. The company added that the project’s details may change in the future according to the business environment and state approval.

“New factories and an increase of supply facilities are expected to constantly push up electricity demand in the future,” Hynix said in the public announcement. “Therefore, we saw the need to secure a stable electricity source for the long term.”

This is the first time a local chipmaker has decided to build a power plant of its own. The move sparked rumors that Hynix may be looking into selling electricity as a new business, but the company said that was not under consideration at the moment and repeated that a more stable power supply for its own plants is its sole goal.

The plants in Icheon and Gyeonggi will have a production capacity of around 570 megawatts per hour. After their completion in 2022, this will be enough to cover roughly half of Hynix’s power consumption in the two areas.

Korea’s No. 2 chipmaker has two factories in Icheon and three in Cheongju, among which the latest M15 finished construction last year and is waiting to be filled with chip manufacturing equipment. Another M16 plant in Icheon has been under construction since December and is set for completion in 2020.

A stable power supply for chip factories is important as even a short blackout can lead to big losses. In March last year, Samsung Electronics saw losses of roughly 50 billion won after a 30-minute power cut at its Pyeongtaek chip factory in Gyeonggi.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]