SK Hynix to Receive $950M in U.S. Funding for Advanced Chip Facility in Indiana

Chip Manufacturer SK Hynix Wins $950M in US Grants and Loans for Advanced Chip Packaging and Research Facility in West Lafayette, Indiana.

SK Hynix Inc. Is gearing up to launch a state of the art chip packaging and research center, in Indiana. The company will be receiving $450 million in grants and $500 million in loans from the U.S. Government under the CHIPS and Science Act initiative to boost the semiconductor industry.

The chip maker in partnership with the U.S. Department of Commerce has signed an agreement to provide incentives of up to $450 million for establishing a high bandwidth memory (HBM) packaging production and research facility. Additionally Washington plans to extend $500 million in government loans for this endeavor. SK Hynix anticipates qualifying for tax benefits amounting to 25% of its capital investments.

This year SK Hynix had unveiled plans to invest $3.87 billion in setting up a memory packaging plant and advanced packaging R&D center in West Lafayette, Indiana. The focus of this facility will be on manufacturing next gen memory chips designed for intelligence (AI) uses. Furthermore, the company has secured a $700 million incentive agreement, with the Indiana Economic Development Corporation (IEDC) reinforcing its dedication to this project.

The recent recognition showcases the agreement outlined in the 2022 CHIPS and Science Act, which allocates $39 billion, in grants $75 billion in loans and assurances. This includes a 25% tax incentive to support the chip industry. The Biden administration has introduced subsidies for five chip manufacturers; SK Hynix, Samsung, Micron, Intel Corp. And Taiwan Semiconductor Manufacturing Co.

SK Hynix caters to clients such as Apple Inc., Microsoft Corp. And Alphabet Inc. By investing up to $15 billion in packaging and research endeavors the company aims to create employment opportunities by 2030 across various sectors like engineering, technical support, administration and maintenance. The facility covers 430,000 feet on a 90 acre site. Is expected to reach full operational capacity by the second half of 2028.

Commerce Secretary Gina Raimondo remarked that the CHIPS and Science Act under the Biden Harris Administration presents an opportunity to strengthen Americas leadership while fostering quality job growth. She emphasized that partnering with SK Hynix would enhance Americas AI hardware supply chain in a way by any country globally.

Purdue University President Mung Chiang expressed excitement about the initiative supported by the Department of Commerce through the CHIPS and Science Act, for establishing a semiconductor manufacturing facility at a U.S. University. Moreover, SK Hynix’s prominent position, in the market for AI memory chips will have an impact through this facility.

SK Hynix Chip Facility in Indiana

The new SK Hynix facility in Indiana will specialize in manufacturing memory (HMB) chips designed for GPUs utilized in training artificial intelligence systems. Collaboration efforts with Purdue University and Ivy Tech Community College are planned for research and development projects as workforce training initiatives. The goal is to establish degree programs to nurture a workforce.

In August 2022, President Biden enacted the CHIPS and Science Act allocating up to $52 billion to incentivize semiconductor companies to set up facilities within the United States. Laurie Locascio, the Director of the National Institute of Standards and Technology highlighted that with investments in firms like SK Hynix the U.S. Stands poised to become a hub, for cutting edge chip manufacturing boasting both production capabilities and significant research presence.