KB News Desk
The U.S. Department of Commerce announced Tuesday (Korea Standard Time) that it will provide up to $450 million in incentives and $500 million in loans to SK hynix in return for the chipmaker’s construction of a memory packaging plant for artificial intelligence (AI) products and an advanced packaging R&D facility in Indiana.
In a press release, the commerce department said it signed a non-binding preliminary memorandum of terms (PMT) with SK hynix to provide up to $450 million in proposed federal incentives under the CHIPS and Science Act.
In addition to the proposed direct funding, the U.S. will offer up to $500 million in proposed loans to SK hynix under the non-binding PMT. The U.S. will also provide tax credits of up to 25 percent of the company’s capital expenditures in the country.
The grants are in response to SK hynix’s commitment in April to invest approximately $3.87 billion in West Lafayette, Indiana, to build a memory packaging facility and an R&D center. The facility will feature advanced semiconductor packaging lines designed to mass-produce the next generation of high-bandwidth memory (HBM), which is crucial for powering graphics processing units (GPUs) used in AI processors.
SK hynix also plans to cooperate with local research institutions, including Purdue University, to research and develop HBM chips. SK hynix now leads the global competition in high-bandwidth memory (HBM), supplying chips for the majority of Nvidia’s GPU products.
“Today’s historic announcement with SK hynix would further solidify America’s AI hardware supply chain in a way no other country on earth can match, with every major player in advanced semiconductor manufacturing and packaging building or expanding on our shores,” U.S. Secretary of Commerce Gina Raimondo said in the press release.
“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 CEO 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 U.S. business partners to ultimately supply leading-edge AI memory products from West Lafayette.”
SK hynix is the 15th company to win U.S. grants and loans under the 2022 CHIPS Act. Among those companies, Samsung Electronics is set to receive $6.4 billion in subsidies to build new foundry facilities in Texas.
