SK Hynix (SKHY.US) officially breaks ground on its first advanced HBM packaging facility in the United States, investing over $4 billion, with mass production set to start in 2029.

South Korean memory chip giant SK Hynix (SHKY.US) held a groundbreaking ceremony on Thursday for its advanced memory chip packaging plant in Indiana, USA. With an investment of over $4 billion, the factory will be SK Hynix's first high-bandwidth memory (HBM) advanced packaging base in the United States and is one of the important projects driving the localization of the critical semiconductor supply chain in the country. As investment in AI infrastructure continues to grow, HBM has become an indispensable core component of advanced AI acceleration systems by companies such as NVIDIA Corporation (NVDA.US). SK Hynix plans to further expand its HBM production capacity through the Indiana project and strengthen its positioning in the U.S. AI chip supply chain. Kwak Noh-Jung, CEO of SK Hynix, stated at the groundbreaking ceremony that the factory's cleanroom is expected to be operational by October 2028, with mass production of the next-generation HBM products planned to begin in the second half of 2029. Once fully operational, this project will become an important HBM production hub for SK Hynix in the USA, with an anticipated direct employment of about 1,000 people. The company also noted that wafers produced in South Korea would be sent to Indiana, where they will undergo advanced packaging and testing before being supplied to U.S. customers. This means that the plant will not be directly responsible for front-end wafer manufacturing, but will take on increasingly critical back-end advanced packaging and testing processes in HBM production. High-bandwidth memory has become one of the most critical semiconductor products in the current global AI hardware investment boom. As the scale of AI models continues to expand, GPUs and AI accelerators need to handle increasingly large amounts of data, and traditional memory is struggling to meet the demands for data transmission speed and bandwidth. HBM can significantly increase data transfer bandwidth by stacking multiple layers of DRAM chips, thus becoming an important component of NVIDIA Corporation's most advanced AI acceleration systems. The surge in demand for AI servers has also propelled the rapid growth of SK Hynix, which has already become the second largest company by market capitalization in South Korea, following Samsung Electronics. Samsung has similarly benefited from the rapid growth in demand for HBM and other memory chips. The SK Hynix Indiana project received support from the U.S. CHIPS and Science Act. Under this program, the company could receive up to $458 million in direct subsidies and up to $500 million in loans, with potential total government funding support reaching $958 million. The CHIPS and Science Act was signed into law in 2022, with one of its primary goals being to reduce U.S. reliance on overseas semiconductor production and to promote the return of chip manufacturing, advanced packaging, and R&D capabilities to the United States. Kwak stated that this factory would help strengthen the domestic AI chip supply chain in the United States. SK Hynix will continue to expand its investments and partnerships in the U.S. in hopes of becoming a key partner in the development of the AI industry in the country. Beyond merely increasing chip manufacturing capacity, another significant aspect of this investment by SK Hynix is advanced packaging. As traditional process miniaturization becomes increasingly difficult, integrating multiple different chips within one package through advanced packaging, and even vertically stacking them, has become an important technological path for improving the performance of AI chips. Advanced packaging has long been one of the relatively weak links in the U.S. semiconductor supply chain. SK Hynix's decision to build an HBM packaging base in the U.S. means that wafers produced in Korea, which are then sent to the U.S. for packaging and testing, will allow some critical AI chip supply chains to further shift to domestic production in the U.S. The company expects that this project, through construction, operation, and related upstream and downstream industries, will ultimately create approximately 7,000 direct and indirect jobs. The company is currently evaluating over 100 potential suppliers of materials, components, and semiconductor equipment. If some of these companies invest locally around the new factory, it could further form a more complete semiconductor industry cluster. SK Hynix has also signed a cooperation agreement with nearby Purdue University to collaborate on R&D in areas such as HBM, system integration, and advanced packaging technology. The company plans to build an advanced packaging R&D testing platform near the production line, combining mass production with the development of next-generation semiconductor technologies. Additionally, SK Hynix's parent company, SK Group, announced that it would provide new job and career development opportunities for U.S. veterans who previously served in the U.S. military stationed in South Korea.