SK Hynix's nearly $4 billion investment settles in Indiana, USA, focusing on HBM chip production

As the Biden administration strives to revitalize the domestic semiconductor industry in the United States, the world's second-largest memory chip manufacturer, SK Hynix, announced that it will invest $3.87 billion to establish an advanced packaging plant and artificial intelligence product development center in the city of West Lafayette, Indiana.

According to the plan, SK Hynix's first US factory is set to begin mass production in the second half of 2028, focusing on the production of the next-generation high-bandwidth memory (HBM) chips urgently needed for high-end GPUs. As a leader in the HBM chip field, SK Hynix has become a key player in the wave of artificial intelligence development, with its memory chips closely integrated with processors from NVIDIA.

About two years ago, SK Group Chairman Choi Tae-won stated that $15 billion would be allocated to build factories in the United States and strengthen research and development investment. The $3.87 billion investment this time is expected to be just a part of it. SK Hynix has already applied for subsidies under the "Chip Act".

This project by SK Hynix marks an important step for the United States to increase advanced packaging capacity (advanced packaging and HBM manufacturing are closely linked), as the packaging process has been a bottleneck hindering the Biden administration's efforts to revitalize the domestic chip industry. Currently, the US only has 3% of global packaging capacity, which means that chips produced in the US often need to be shipped to Asia for assembly.

Chips have become a focal point of international competition. The US government is investing billions of dollars in an attempt to reduce reliance on Asian suppliers and provide significant financial incentives to global chip manufacturers to increase capacity in the US. Since Biden took office, semiconductor companies have committed to investing over $230 billion in the US, partly due to the "Chip Act" introduced in 2022.

Last month, Intel received $8.5 billion in subsidies and $11 billion in loans to support its investments of over $100 billion in the US. It is reported that the Biden administration also plans to provide over $6 billion to SK Hynix's competitor Samsung, while TSMC will receive over $5 billion in funding.

So far, most of these investment projects have been located in Texas, New York, and Arizona. Arizona alone has attracted investments of over $60 billion from dozens of companies including TSMC and Intel. In 2022, the US domestic wafer manufacturer SkyWater Technology also announced a partnership with Indiana and Purdue University to invest $1.8 billion in building semiconductor research and production facilities