The U.S. Department of Commerce announced on Tuesday (August 6) that it plans to provide up to $450 million in subsidies to the South Korean company SK Hynix to build an advanced packaging plant and an artificial intelligence product research facility in Indiana, filling a crucial gap in the U.S. semiconductor supply chain.
According to a report by Nikkei Asia on Tuesday, in April of this year, SK Hynix, the world’s second-largest memory chip manufacturer, announced plans to invest around $3.87 billion to build a factory in West Lafayette, Indiana. This supplier for Nvidia stated that the plant will manufacture next-generation chips for AI system training. It will include an advanced production line for mass production of next-generation high-bandwidth storage chips. Currently, these chips are used for training the graphic processing units of AI systems.
Additionally, the Department of Commerce also plans to provide a $500 million government loan for the SK Hynix project, with expectations that the project will qualify for a 25% investment tax credit.
The Department of Commerce stated that the new memory packaging plant for AI products and advanced chip research facilities will create 1,000 job opportunities in the United States and fill a critical gap in the U.S. semiconductor supply chain.
Reports indicate that the U.S. has secured significant commitments from all five leading semiconductor chip manufacturers: TSMC, Intel, Samsung Electronics, Micron, and SK Hynix.
Commerce Secretary Gina Raimondo told reporters, “This means that the United States will have the most secure and diversified advanced semiconductor supply chain globally, empowering artificial intelligence.” The Department of Commerce pointed out that, other than the U.S., no other economy in the world “has more than two companies producing cutting-edge chips within its borders.”
SK Hynix CEO Kwak Noh-Jung expressed gratitude in a statement, saying, “I sincerely appreciate the support of the U.S. Department of Commerce and am pleased to collaborate with the U.S. to see the comprehensive realization of this transformative project.”
SK Hynix is a South Korean supplier of dynamic random-access memory (DRAM) chips and flash memory chips, and is one of the largest semiconductor suppliers worldwide.
Established in 1983, SK Hynix, formerly known as Hyundai Electronics, merged into the Korean SK Group in 2012 following a series of mergers, acquisitions, and reorganizations.
The company’s major clients include Nvidia, Microsoft, Apple, Asus, Dell, MSI, HP, and others. Products using SK Hynix memory also include DVD players, mobile phones, set-top boxes, personal digital assistants, network devices, and hard drives.