The SK Hynix logo displayed on a phone screen as shown in this illustrative photo taken in Krakow, Poland, on January 30, 2023.
Jakub Porzycki | Nurphoto | Getty Images
SK Hynixone of the world’s largest memory chip makers said it will invest $3.87 billion in its first U.S. chip packaging plant, marking another victory for the Biden administration’s efforts toward chip manufacturing onshore.
The West Lafayette, Ind.-based South Korean company announced the project Wednesday at an event at Purdue University attended by Indiana state and U.S. government officials.
SK Hynix said the facility, scheduled for operation in 2028, will house a production line for SK Hynix’s cutting-edge high-bandwidth memory chips, important components in Nvidia GPUs used to train artificial intelligence systems such as ChatGPT.
“We are excited to become the first in the industry to build a state-of-the-art advanced packaging facility for AI products in the United States,” SK Hynix CEO Kwak Noh-Jung said in a statement, adding that it would “strengthen chain resilience supply and develop a local semiconductor ecosystem.”
According to the company, the project will also bring more than a thousand new jobs to the region and include a research and development facility to develop future generations of chips.
US CHIPS law
The planned facility in Indiana adds to a long list of new semiconductor investments announced in the United States since the August 2022 passage of the U.S. CHIPS and Science Act, which seeks to bolster the domestic chip industry seen as critical to the economy and national security.
The law provides billions in incentives to companies to onshore chip production in the United States, provided they do not expand certain semiconductor manufacturing operations in China and other countries considered a national security risk.
Sen. Todd Young, R-Ind., said in a statement, “The CHIPS and Science Act opened a door through which Indiana was able to sprint, and companies like SK hynix are helping build our future high tech”.
Other Asian chipmaking giants have moved to the United States in recent years. That of South Korea SAMSUNG is building a $17 billion chip-making plant in Texas and Taiwan TSMCthe world’s largest chip foundry, has committed $40 billion to two chip foundry plants in Arizona.
While CHIPS Act funding took more than a year to distribute, the White House awarded Intel up to $8.5 billion in grants last month, with billions more in loans available.
SK Hynix rose more than 4% in Thursday trading on the Korean Stock Exchange. The company’s stock price has skyrocketed more than 120% in the past year, due to the hype surrounding Nvidia and artificial intelligence.