SK Hynix Breaks Ground on $3.87 Billion Indiana AI Memory Packaging Plant
Summary
- SK Hynix said it will invest a total of $3.87 billion to build an advanced packaging production base for AI memory in Indiana.
- The investment will establish an end-to-end supply chain to mass-produce next-generation HBM and other advanced AI memory products from the second half of 2028 and supply them to big tech customers including Nvidia.
- SK Hynix said it will receive up to $712.18 million in subsidies from Indiana, and described the investment as a move to expand market share and ease US trade risks.
Forecast Trend Report by Period
$3.87 billion project to start operations in 2028
SK Hynix has begun construction of an advanced packaging plant for artificial intelligence memory in Indiana. The investment is set to deepen an AI semiconductor partnership spanning SK Hynix, Nvidia Corp. and Taiwan Semiconductor Manufacturing Co.
SK Hynix held a groundbreaking ceremony for the plant on Aug. 27 at Purdue University in West Lafayette, Indiana. The event came two years and four months after the company unveiled the investment plan in April 2024. Chief Executive Officer Kwak Noh-jung, other company executives and US government officials attended.
The facility will be SK Hynix's first production and research-and-development base in the US. The company is investing $3.87 billion in the project. The site covers 540,000 square meters, making it the largest single development project in Indiana's history. Under an agreement signed with the Indiana Economic Development Corp. in June 2024, SK Hynix will receive subsidies of up to $712.18 million through 2055.
SK Hynix plans to begin mass production of next-generation high-bandwidth memory, or HBM, and other advanced AI memory products at the site in the second half of 2028. It will ship wafers made at its Icheon and Cheongju operations in South Korea to the US for packaging, then deliver the finished products directly to big tech customers including Nvidia.
An industry official said the investment was intended to ease US trade risks and expand market share. The move also allows SK Hynix to respond more actively to pressure from the US government for domestic investment while reducing the distance to TSMC's Arizona operations and local big tech customers.
The project also offers advantages in infrastructure and talent. Indiana has emerged as a Midwestern "Silicon Heartland" after attracting research-and-development bases from Taiwan's MediaTek Inc. and IMEC, one of the world's largest semiconductor research institutes. SK Hynix also expects its industry-academic partnership with Purdue University, known for semiconductor engineering, to help it secure key back-end technologies such as next-generation 3D packaging.
Kim Chae-yeon, Hankyung.com reporter why29@hankyung.com
Korea Economic Daily
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