Major Investment Supports Semiconductor Manufacturing Growth
SK hynix Inc. has been awarded $458 million in subsidies from the U.S. government to enhance semiconductor production capabilities within the United States. This funding, announced by the U.S. Department of Commerce under the CHIPS Act, is part of a national effort to expand domestic chip manufacturing and secure supply chains for advanced technologies. The subsidy follows a thorough review process initiated after the preliminary memorandum of terms (PMT) signed in August 2024.
New AI Chip Facility to Boost Employment and Innovation
SK hynix plans to invest $3.87 billion in the construction of a manufacturing and research center in West Lafayette, Indiana. The facility will specialize in advanced packaging for artificial intelligence (AI) semiconductors, specifically producing high-bandwidth memory (HBM) chips, crucial for AI technology. This project is expected to generate over 1,000 permanent jobs and create several hundred construction positions. Additionally, SK hynix will collaborate with Purdue University to establish a research facility, promoting innovation and workforce development.
Phased Subsidy Disbursement and Strategic Goals
The U.S. government will release the $458 million subsidy in stages, aligning with the progress of SK hynix’s facility development. In addition to the grant, the company is set to receive up to $500 million in loans. Despite earlier uncertainties regarding potential reductions under a new administration, the finalized subsidy slightly surpasses the amount outlined in the initial agreement.
U.S. Secretary of Commerce Gina Raimondo highlighted that the partnership between SK hynix and Purdue University will fortify the nation’s AI hardware supply chain, boost employment in Indiana, and advance national economic and security interests. SK hynix CEO Kwak Noh-jung reaffirmed the company’s dedication to building a resilient AI semiconductor supply chain in collaboration with U.S. partners.
