South Korean semiconductor giant SK Hynix has announced a massive investment of $3.9 billion in constructing a new chip packaging fabrication plant in Indiana.
The move is set to help fortify the United States' semiconductor manufacturing industry, in line with President Joe Biden's agenda to enhance domestic chip production capabilities.
SK Hynix to Establish New Chip Plant in Indiana
Reuters tells us that the new facility, to be established in West Lafayette, Indiana, will focus on producing high bandwidth memory (HBM) chips, crucial components utilized in artificial intelligence (AI) systems, particularly in graphic processing units (GPUs) used by companies like Nvidia. Mass production of these advanced chips is anticipated to commence in the second half of 2028.
CEO Kwak Noh-Jung expressed excitement over becoming the industry's pioneer in erecting a state-of-the-art advanced packaging facility for AI products within the United States.
"We believe this project will lay the foundation for a new Silicon Heartland, a semiconductor ecosystem centered in the Midwest Triangle. This facility will create local, high-paying jobs and produce AI memory chips with unmatched capabilities so that America can onshore more of its critical chip supply chain, the CEO said.
The decision to invest in Indiana was influenced by the state's robust manufacturing infrastructure, a talent pool from Purdue University, and substantial support from the state government.
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(Photo : JUNG YEON-JE/AFP via Getty Images)
The logo of SK Hynix is seen outside the company's Bundang office in Seongnam on January 26, 2024. The world's second-largest memory chip maker, South Korea's SK Hynix, said on January 25, it had returned to profit after four consecutive quarters of losses driven by demand for chips used in artificial intelligence.
US Government's Chip-making Push
This significant investment by SK Hynix is part of its broader commitment to allocate $15 billion toward the semiconductor industry, including research and development initiatives and the establishment of advanced packaging and testing facilities in the US. The company's market value has surged, propelled by soaring demand for AI chips.
The endeavor also aligns with the US CHIPS and Science Act, passed in 2022, which earmarks nearly $53 billion to revitalize the domestic chip supply chain and propel research and development efforts.
Under this act, SK Hynix joins other major players like Intel, Samsung, and Taiwan Semiconductor Manufacturing Co. (TSMC) in receiving substantial funding to bolster semiconductor manufacturing capabilities within the country.
Senator Todd Young of Indiana emphasized the importance of the CHIPS Act in propelling high-tech advancements, stating, "The CHIPS and Science Act opened a door that Indiana has been able to sprint through, and companies like SK Hynix are helping to build our high-tech future."
The investment by SK Hynix comes amidst a series of similar moves by other Asian chipmakers, with South Korea's Samsung embarking on a $17 billion chip fabrication plant project in Texas, and Taiwan's TSMC committing $40 billion for two foundry chip facilities in Arizona.
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