SK Hynix (SKHY.US) is investing $4 billion to build its first factory in the U.S.! Aiming to become a key HBM production base in the U.S. by 2030.

As one of the biggest beneficiaries of the artificial intelligence (AI) boom, South Korean memory chip giant SK Hynix (SKHY.US) is strengthening its presence in the United States. On Thursday, SK Hynix held a groundbreaking ceremony for its first factory in the U.S. in West Lafayette, Indiana. During his speech at the ceremony, President Kuang Ruzheng emphasized the strong demand for high bandwidth memory (HBM) in the AI sector and stated that the new factory in West Lafayette will make Indiana "a key HBM production base in the United States by 2030." Kuang Ruzheng remarked, "We will provide customers with a new source of American-made HBM, while strengthening the U.S. semiconductor supply chain and contributing to national security and economic stability." As the current market leader in HBM, SK Hynix is undertaking a $720 billion expansion plan to increase HBM capacity, most of which will take place in South Korea. The company is constructing the world's largest memory chip wafer fab complex in Korea, with local production expected to commence in February next year. It is reported that the $4 billion factory in West Lafayette will focus on advanced semiconductor packaging rather than wafer front-end manufacturing. This means the factory will be responsible for stacking and connecting memory chips. Kuang Ruzheng stated on Thursday that the factory's first cleanroom for packaging is expected to be operational by October 2028. Although packaging is a crucial part of the chip manufacturing process, U.S. Secretary of Commerce Gina Raimondo called for SK Hynix and its main competitor Samsung Electronics to build front-end chip wafer fabs in the U.S. in July. Kuang Ruzheng noted that SK Hynix is looking for suitable opportunities and is "open to any location or country." He also stated, "SK Hynix will continue to expand investment and cooperation in the U.S." Indiana's Republican Governor Mike Braun stated that the project will be "the largest development project in Indiana's history" and "the first of its kind in the nation." Indiana Republican Senator Todd Young commented, "For too long, the U.S. has designed many of the world's most advanced chips while allowing too much of the manufacturing ecosystem to move overseas." Speaking about efforts to bring production back to the U.S., he remarked, "Todays groundbreaking proves that this vision is becoming a reality." Kuang Ruzheng indicated that by 2030, SK Hynix's total investment and assets in the U.S. are expected to exceed $45 billion. Aside from the new project in Indiana, SK Hynix has already established operations in the U.S. In 2020, SK Hynix spent $9 billion to acquire Intel Corporation's NAND flash memory business, eventually forming a subsidiary called Solidigm. In January this year, SK Hynix completed a business reorganization in that sector and invested $10 billion in the U.S. to establish a subsidiary focused on AI. According to the Indiana Economic Development Corporation, to help build the new Indiana factory, SK Hynix will receive up to $458 million in funding from the federal CHIPS and Science Act, as well as up to $712 million in state government incentives, the latter being the second largest incentive program in the state's history. The project is set to be announced in 2024 and will cover 133 acres, including a packaging plant and a research and development center. Top AI customers can co-develop memory chips with SK Hynix at these R&D centers. As SK Hynix develops the next generation of memory chips, this opportunity is continuously expanding. In the future, these memory chips could be custom-designed to work collaboratively with AI accelerators that incorporate them. Leading global AI chip manufacturer NVIDIA Corporation has already committed to co-developing memory chips with SK Hynix as part of the $500 billion deal reached with SK Group announced in July. SK Hynix stated that the Indiana factory will create approximately 1,000 direct jobs and will also spur an additional 6,000 jobs related to construction and business partnerships. In the early phases of the project, SK Hynix stated it will temporarily send employees from Korea to the U.S., but plans to fill long-term positions with local U.S. employees, including students from nearby Purdue University. Purdue University offers several semiconductor-related degree programs. Purdue University acting president and former Indiana governor Mitch Daniels stated on Thursday, "In the 167-year history of Purdue University, there has not been a day more important than today."