The U.S. Commerce Department announced on Thursday it has finalized an award of up to $458 million in grants for SK Hynix to fund an advanced chip packaging and R&D facility in Indiana. The West Lafayette facility, set to support the production of next-generation high-bandwidth memory chips for AI systems, marks a significant investment in strengthening the U.S. semiconductor supply chain.
SK Hynix, a key supplier to Nvidia, plans to invest $3.87 billion in the project. The facility will include an assembly line for high-bandwidth memory chips used in GPUs critical for training artificial intelligence systems. Additionally, the department has committed $500 million in government loans to support the project, with grant funds tied to SK Hynix meeting specific milestones.
The project is expected to generate 1,000 jobs and address a key gap in the U.S. semiconductor supply chain. Kwak Noh-Jung, CEO of SK Hynix, emphasized the company’s commitment to creating a “robust and resilient AI semiconductor supply chain in the U.S.” in a statement.
This initiative is part of a broader $39 billion U.S. subsidy program approved by Congress in August 2022, aimed at bolstering semiconductor manufacturing. The program also provides $75 billion in lending authority. The Commerce Department has awarded major grants to leading chipmakers, including Intel, TSMC, Samsung Electronics, Micron, and SK Hynix. While most awards are finalized, the $6.4 billion grant for Samsung is still pending.
Earlier this month, the Commerce Department awarded $75 million to Absolics, an SKC affiliate, for building a facility in Georgia to supply advanced materials to the U.S. semiconductor industry. Absolics is part of SK Group, South Korea’s second-largest conglomerate, which also includes SK Hynix.
