Wednesday, April 17, 2024

Global Chip Manufacturer SK Hynix Plans $3.87 Billion Investment in US Chip Plant

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The SK Hynix project encompasses a packaging fabrication and R&D facility for their next-generation AI chip products, set to generate a thousand jobs in Indiana, aligning with the Biden administration’s objective of bolstering domestic chip production. SK Hynix, a global leader in memory chip manufacturing, pledges a $3.87 billion investment in its inaugural chip packaging facility within the U.S., marking a significant triumph for the Biden administration’s initiative to relocate chip production onshore.

The South Korean company unveiled the project, based in West Lafayette, Indiana, during an event at Purdue University, attended by officials from Indiana State and the U.S. government.

The facility, scheduled to commence operations in 2028, will feature a production line dedicated to SK Hynix’s cutting-edge high-bandwidth memory chips, vital components utilized in Nvidia GPUs essential for training AI systems such as ChatGPT.

SK Hynix CEO Kwak Noh-Jung expressed enthusiasm, stating, “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,” highlighting its role in enhancing supply chain resilience and fostering a local semiconductor ecosystem.

Additionally, the project is poised to introduce over a thousand new job opportunities to the region and will incorporate an R&D facility aimed at cultivating future chip generations.

This forthcoming Indiana facility joins a roster of new semiconductor investments announced in the U.S. since the passage of the U.S. CHIPS and Science Act in August 2022, aiming to fortify the domestic chip industry vital for the economy and national security.

Under the act’s provisions, companies are incentivized with billions to relocate chip production to the U.S., contingent on refraining from expanding certain semiconductor manufacturing operations in countries like China deemed national security risks.

Sen. Todd Young, R-Ind., lauded the CHIPS and Science Act, 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.”

In recent years, other Asian chipmaking giants have also gravitated towards the U.S. South Korea’s Samsung is erecting a $17 billion chip fabrication plant in Texas, while Taiwan’s TSMC, the world’s largest chip foundry, has committed $40 billion for two foundry chip facilities in Arizona.

Although the distribution of CHIPS Act funding took over a year, last month, the White House granted Intel up to $8.5 billion in grants, with additional billions available in loans.

SK Hynix witnessed over a 4% surge in Thursday trading on the Korea Stock Exchange, reflecting investor enthusiasm, with the company’s share price soaring over 120% in the past year amid burgeoning excitement surrounding Nvidia and AI.

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