SK hynix pumps $3.9 billion into first U.S. manufacturing base

Employee walk past the logo of SK hynix at its headquarters in Seongnam, South Korea, April 25, 2016. [REUTERS/YONHAP]

SK hynix announced a $3.9 billion investment package in West Lafayette, Indiana Wednesday where the Korean memory chipmaker will build its first U.S. manufacturing base.

The company will build advanced packaging facilities for AI chips in the city as well as research and development (R&D) spaces where it will collaborate with Purdue University, which is known for its chip engineering programs.

The announcement was made at an investment agreement ceremony held at Purdue University on Wednesday, local time, with various stakeholders including SK hynix CEO Kwak Noh-jung, Indiana Gov. Eric Holcomb and Purdue University President Mung Chiang in attendance.

“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 that will help strengthen supply-chain resilience and develop a local semiconductor ecosystem,” said CEO Kwak.

“With this new facility, we hope to advance our goal of providing AI memory chips with unmatched capabilities, serving the needs of our customers.”

The new facilities will be dedicated to producing high bandwidth memory (HBM) chips for which mass production is planned for the latter half of 2028, SK hynix said. It will also develop of future generation chips and advanced packaging at the plant.

“The site was selected due to Indiana’s resilient manufacturing infrastructure and R&D ecosystem, expert intellectuals in the semiconductor field and the talent pipeline at Purdue University and the strong support provided by the state and local government,” SK hynix said in a release.

SK hynix is a leader in highly coveted HBM chips, which have become essential components of the GPUs required for AI training. The Korean company grabbed 53 percent of the market last year, according to TrendForce.

The Wednesday announcement is a follow-up to SK Group Chairman Chey Tae-won’s 2022 pledge to U.S. President Joe Biden wherein the executive promised to devote $15 billion to chip manufacturing and research in the U.S.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]