June 29, 2012 / 7:11 AM / 5 years ago

SK Hynix boosts flash chip capacity to meet rising demand

SEOUL (Reuters) - South Korea's SK Hynix, the world's fourth-biggest NAND flash memory chipmaker, completed a new semiconductor line that will help meet rising demand for data-storage chips used in Apple's smartphones and tablets.

The new capacity comes as chipmakers gear up for high-profile launches of ultra-slim laptops, smartphones and tablets in the second half of this year.

SK Hynix, which mainly produces Dynamic Random Access Memory chips used in computers, is targeting to increase the revenue share of NAND chips to 30 percent this year from about 20 percent a year earlier.

The global market for NAND chips is estimated to rise to around $29 billion this year from $25 billion a year earlier, according to research firm Gartner.

SK Hynix is planning to invest around 4.2 trillion won ($3.6 billion) this year, and more than half will be spent to increase production of NAND chips.

The new chip line will add to four existing semiconductor fabs, the firm said in a statement on Friday.

The new line comes after SK Hynix announced a 287 billion won deal earlier this month to acquire privately held chip controller firm Link_A_Media Devices Corp (LAMD) to produce packaged chips.

Its bigger rival Samsung Electronics is building a $7 billion NAND chip plant in China, betting booming sales of mobile gadgets will drive the flash chip market.

SK Hynix trails Samsung, Japan's Toshiba Corp and U.S.-based Micron Technology Inc in flash chip production.

Reporting by Miyoung Kim; Editing by Ryan Woo

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