SK hynix announces $3.9 billion for first chip facility in U.S.

Tech

Published: 04 Apr. 2024, 18:26 Updated: 04 Apr. 2024, 18:27

SK hynix announces $3.9 billion for first chip facility in U.S.

SK hynix executives and U.S. government officials attend an investment agreement ceremony held at Purdue University on Wednesday. From left to right: Mung Chiang, Purdue University president; Indiana Gov. Eric Holcomb; Kwak Noh-jung, SK hynix president and CEO; Choi Woo-jin, SK hynix executive vice president; Arati Prabhakar, chief science and technology advisor at the White House; U.S. Sen. Todd Young of Indiana; Arun Venkataraman, U.S. Department of Commerce assistant secretary; Cho Hyun-dong, ambassador of the Republic of Korea to the United States; David Rosenberg, Indiana secretary of commerce; Mitch Daniels, Purdue Research Foundation chairman. [PURDUE RESEARCH FOUNDATION]

SK hynix will build a $3.9 billion chip packaging facility that will create over a thousand jobs in the U.S. state of Indiana as the Korean memory chip maker seeks to fortify its status as a leading supplier of high-performing AI chips for big U.S. clients like Nvidia.

Located in the city of West Lafayette, the site will house an advanced packaging fabrication facility as well as research and development (R&D) spaces.

It will be SK hynix’s first chip-producing complex in the U.S., with the company’s existing manufacturing and packaging lines all based in Korea and China.

Given that the packaging process is the final step in semiconductor fabrication, the facility could allow for swifter delivery of high bandwidth memory (HBM) chips to U.S. clients.

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

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

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

The new facilities will be dedicated to producing HBM chips, with mass production planned for the latter half of 2028, SK hynix said. HBM chips are essential components of the GPUs required for AI training, and the Korean company grabbed the largest share of the HBM market at 53 percent last year, according to market tracker TrendForce.

In the R&D spaces of the facility, SK hynix will collaborate with Purdue University, which is known for its chip engineering programs.

“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 as well as the strong support provided by the state and local government,” SK hynix said in a release.

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

“When President Biden signed the bipartisan CHIPS and Science Act, he put a stake in the ground and sent a signal to the world that the United States cares about semiconductor manufacturing,” said Arati Prabhakar, President Biden’s chief science and technology advisor in the statement.

At home, the chipmaker is setting up a large-scale chip production complex in Yongin, an initiative that it says will proceed regardless of the U.S. investment.

“Separately, SK hynix will also proceed with Korean domestic investments as planned. The company has been working to prepare the site for the Yongin Semiconductor Cluster where it will invest 120 trillion won to build production facilities,” it said.

The company plans to break ground on the first manufacturing plant in March, 2025, aiming for completion in early 2027.

BY PARK EUN-JEE, JIN EUN-SOO [park.eunjee@joongang.co.kr]