US to award SK Hynix up to $450 mn for Indiana chip complex

The US government said on Tuesday it plans to provide SK Hynix Inc., the world’s leading high-bandwidth memory (HBM) chipmaker, up to $450 million in grants to help fund its AI chipmaking complex in Indiana.

The US Department of Commerce said it and SK Hynix signed a non-binding preliminary memorandum of terms (PMT) for financial support to establish an HBM advanced packaging fabrication and research and development (R&D) facility in the Midwestern state of Indiana.

Under the PMT, the commerce department also plans to furnish $500 million in government loans for the company’s $3.9 billion project, which is expected to qualify for a 25% investment tax credit.

“We deeply appreciate the US Department of Commerce’s support and are excited to collaborate in seeing this transformational project fully realized,” said SK Hynix CEO Kwak Noh-Jung in a statement issued by the commerce department.

TO MOVE FORWARD CONSTRUCTION

SK Hynix, the world’s No. 2 memory chipmaker in April unveiled a plan to establish an advanced HBM packaging complex in West Layfayette, Indiana, for mass production by the second half of 2028. It would be the first of its kind in the US and the company’s first overseas plant producing the core chip used to power AI devices.

The US government’s financial support is expected to speed up the establishment of the complex.

The South Korean supplier to Nvidia Corp. aims to cement its HBM leadership through the facility, which is expected to focus on developing new models and cooperating with partners, while fostering local semiconductor talent.

“We are moving forward with construction of the Indiana production base, working with the state of Indiana, Purdue University and our US business partners to ultimately supply leading-edge AI memory products from West Lafayette,” Kwak said.

Write to Jeong-Soo Hwang at hjs@hankyung.com
 
Jongwoo Cheon edited this article.