SK Hynix plans to invest $3.87 billion in U.S. chip facility

SK Hynixone of the world’s largest memory chip makers, announced it will invest $3.87 billion in its first chip packaging plant in the United States, marking another victory for the Biden administration’s efforts to to relocate chip production.

The South Korean company announced the West Lafayette, Ind.-based project at an event at Purdue University on Wednesday, attended by Indiana state and U.S. government officials.

SK Hynix said the facility, scheduled to come online in 2028, will house a production line for SK Hynix’s cutting-edge, high-bandwidth memory chips – important components of Nvidia GPUs used to form computer systems. AI like 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 this would “strengthen supply chain resilience and develop a local semiconductor ecosystem.

The project will also create more than a thousand new jobs in the region and include an R&D facility to develop future generations of chips, according to the company.

The planned Indiana facility joins 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 aims to grow the domestic semiconductor industry. chips considered essential to the economy and national security.

The law provides billions in incentives for companies to produce chips in the United States, provided they do not expand certain semiconductor manufacturing operations in China and other countries considered a risk to national security.

Sen. Todd Young, R-Ind., said in a statement: “The CHIPS and Science Act opened a door that Indiana was able to sprint through, and companies like SK hynix are helping build our high-tech future . »

Other Asian chipmaking giants have been attracted to the United States in recent years. South Korea Samsung builds $17 billion chip manufacturing plant in Texas, Taiwan TSMCthe world’s largest chip foundry, has committed $40 billion for two chip foundry facilities in Arizona.

While the distribution of CHIPS Act funds took more than a year, last month the White House awarded Intel up to $8.5 billion in grants, with billions more in loans available.

SK Hynix was up more than 4% on Thursday on the Korea Stock Exchange. The company’s stock price has soared more than 120% over the past year, amid excitement about Nvidia and AI.