US officials announced a preliminary deal with SK Hynix to invest $450 million in CHIPS Act funds to boost a high-bandwidth memory advanced packaging fab and R&D facility in West Layfayette, Indiana.
The deal fills a critical gap in the US semiconductor supply chain that “no other country can match with every major player in advanced semiconductor manufacturing and packaging building or expanding on our shores,” Commerce Secretary Gina Raimondo said in a statement.
The $450 million would support SK Hynix’s investment of nearly $3.9 billion in West Lafayette. SK Group has previously announced plans to invest in American manufacturing, including EV batteries and biotech. SK Hynix is the world leader in HBM.
The Indiana facility is located at Purdue University Research Park. SK Hynix expects to produce HBM chips that process 1.18 terabytes of data per second, about the same amount of data opf 230 full HD movies. Mass production at the facility is expected to happen in the second half of 2028.
“We are moving forward with the construction of the Indiana production base, working the state of Indiana, Purdue University and our US business partners to ultimately supply leading0edge AI memory product from West Lafayette,” said SK Hynix CEO Kwak Noh-Jung.
SK Hynix is expected to collaborate with Purdue on future R&D projects, including work on advanced packaging and heterogeneous integration with Purdue’s Birck Nanotechnology Center and others. The company and Purdue and Ivy Tech Community College will develop training programs and curricula to cultivate a pipeline of new talent.
The CHIPS program is also expected to loan $500 million to SK Hynix and the company is expected to claim the Treasury Department’s Investment Tax Credit of 25% of qualified capital expenditures.
President Biden signed the CHIPS and Science Act into law nearly two years ago and it provides $52 billion in direct funding for semiconductor and packaging assistance to bring vital chip supplies to domestic sites, including from the largest international chip fabricators. Of that total, $39 billion is going to companies, with $11 billion for research and $2 billion for defense.
More than $30 billion of the $39 billion has been distributed under preliminary deals with the lion’s share going to the world’s largest companies, including multiple billions to each of Micron, Intel, Samsung, TSMC, and GlobalFoundries. Commerce said the $30-plus billion has helped unlock over $300 billion in public and private investment and has led to the potential creation of 100,000 jobs.
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