SK Hynix is investing $2.7 billion in its home country and China to boost memory chip production.
There is a bit of a boom in demand for memory chips and Hynix wants to take advantage of that.
Most of the investment will build a new plant to make NAND flash chips used for long-term data storage.
A spokes Hynix said that to grow further, it is important to secure production facilities in advance to deal with NAND Flash market growth to be led by 3D NAND solutions.
Cash will be spent on the NAND chip plant which will be in South Korea, and a big chunk to boost DRAM capacity at its existing facilities at Wuxi, China.
Analysts think strong demand for memory chips will likely continue in 2017 as it will take several years for capacity spending announced by key players to yield meaningful production growth.
Supply will also be constrained as chipmakers shift to new production methods. In the NAND market, many manufacturers are converting existing production lines to high-end 3D NAND technology.