SK Hynix will invest 2.2 trillion won ($1.8 billion) to build a new fabrication facility that produces NAND flash memory in its factory in Cheongju, South Korea, the company announced.
The world's second largest memory chip maker will also put additional investment into its counterpart in Wuxi, China, which mostly produces dynamic random-access memory (DRAM), to meet rising demand from local customers there.
The new fab will begin construction in August 2017, with an estimated completion date in June 2018. The expansion is part the company's 2015 pledge to invest 46 trillion won to build three new fabs.
The factory at Cheongju was set up in 2008 and has been the main hub for SK Hynix to increase NAND flash memory production, which continues to be in high demand thanks to smartphones, SSDs, and data centers.
The company said the expansions are mainly to meet the large demand for 3D NAND flash memory, thanks to rise in memory capacity in devices.
According to South Korea's customs agency, as of December 12, semiconductor exports were at $27 billion, a rise of 11.6 percent from a year ago.
Competitor Samsung Electronics is the world's largest memory chip maker and a leader in the production of 3D NAND flash memory. SK Hynix is runner-up for memory overall, but in fifth place in NAND flash memory production specifically, according to IHS.
In 2015, 82 million gigabytes worth of NAND flash memory was sold. This will grow to 508 million in 2020, an annual growth of 44 percent, also according to IHS.