South Korean semiconductor manufacturer SK Hynix Inc (NASDAQ:SKHY) has secured $950 million from the US Department of Commerce under the CHIPS and Science Act to build out a semiconductor packaging facility in Indiana.
SK hynix is one of the world's leading manufacturers of DRAM (dynamic random-access memory) and NAND flash memory chips. These memory solutions are widely used in computers, servers, mobile devices, and other electronic equipment.
SK hynix is a lesser-known player in the global chip supply chain, but the investment forms part of a wider strategy to shore up domestic chip manufacturing capabilities in the US.
The Biden administration has earmarked $54 billion in funding through the CHIPS Act in order to strengthen the supply line, partially in response to heightened geopolitical uncertainty between China and global semiconductor powerhouse Taiwan.
To date, Intel is the biggest benefactor of the CHIPS Act, having received $8.5 billion in March.
SK hynix’s $950 million package comprises $450 million in direct funding and $500 million in loans.
“We deeply appreciate the U.S. Department of Commerce’s support and are excited to collaborate in seeing this transformational project fully realized,” said SK hynix chief executive Kwak Noh-Jung.
“We are moving forward with the construction of the Indiana production base, working with the State of Indiana, Purdue University and our US business partners to ultimately supply leading-edge AI memory products from West Lafayette.
“We look forward to establishing a new hub for AI technology, creating skilled jobs for Indiana and helping build a more robust, resilient supply chain for the global semiconductor industry.”
SK hynix has committed $3.87 billion of its own capital to build out its Indiana production base.