The U.S. Commerce Department has finalized a grant of up to $458 million to SK Hynix to support the development of an advanced chip packaging facility and a research and development center for artificial intelligence (AI) products in Indiana. This funding is part of a broader $3.9 billion investment by the South Korean semiconductor giant in the state, aimed at strengthening the U.S. semiconductor supply chain.
The new facility, located in West Lafayette, Indiana, will include an assembly line dedicated to the mass production of next-generation high-bandwidth memory chips. These chips are crucial for powering graphic processing units (GPUs) that train AI systems. SK Hynix, a key supplier for Nvidia, first announced plans for the project in April.
In addition to the $458 million grant, the U.S. Commerce Department plans to provide $500 million in government loans to support SK Hynix’s project. These funds will be disbursed incrementally, contingent upon the company achieving specific project milestones.
The project, expected to create 1,000 new jobs, will address a critical gap in the U.S. semiconductor supply chain. By establishing advanced chip packaging and production capabilities, the facility will enhance the country’s position in the rapidly evolving AI and semiconductor sectors.
Kwak Noh-Jung, CEO of SK Hynix, discussed the company’s plans to build a resilient AI semiconductor supply chain in the U.S. The company aims to advance technology and support global innovation in artificial intelligence and memory chip production.
The grant and loan package is part of the CHIPS and Science Act, a $39 billion subsidy initiative approved by Congress in August 2022 to boost U.S. semiconductor manufacturing. The Act also authorized $75 billion in government loans for related projects. The Commerce Department has been finalizing grants for key semiconductor companies, including Intel, Micron, SK Hynix, TSMC, and Samsung Electronics, with only Samsung’s $6.4 billion allocation yet to be approved.
While most grants have been finalized, the $6.4 billion allocation for Samsung is still pending. Additionally, an SKC affiliate, Absolics, recently received a $75 million grant to build a facility in Georgia that will supply advanced materials for semiconductor production.
The U.S. government plans to address the growing demand for semiconductors due to advancements in artificial intelligence and next-generation technologies. U.S. Commerce Secretary Gina Raimondo emphasized the impact of the CHIPS and Science Act, stating that investments in companies like SK Hynix and communities such as West Lafayette are helping to reinforce America’s global technology leadership.
