The US Department of Commerce has signed a non-binding preliminary memorandum of terms with SK Hynix to provide up to $450 million of proposed funding under the CHIPS and Science Act.
The funding will support the company’s planned $3.87bn investment to establish a high-bandwidth memory (HBM) advanced packaging fabrication and research and development (R&D) facility in West Lafayette, Indiana.
The facility was confirmed by the South Korean chip manufacturer in April 2024, with mass production at the plant expected in the second half of 2028.
In addition to producing next-generation HBM, the site will also function as an R&D facility for AI products, with SK Hynix planning to collaborate with Purdue University and Ivy Tech Community College to develop training programs and a new curriculum to help cultivate a talent pipeline in the region.
A project in conjunction with Purdue’s Birck Nanotechnology Center to develop memory-centric solutions and system-level memory design and in/near-memory computing for generative AI solutions is also planned.
The facility will create around 1,000 new jobs and fill a “critical gap in the US semiconductor supply chain,” the Department of Commerce said in a statement.
“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,” said Kwak Noh-Jung, CEO of SK Hynix.
“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.”
US Secretary of Commerce Gina Raimondo added: “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.”
The $280bn CHIPS and Science Act was approved by Congress in July 2022, with $52bn of the overall funding package designated as subsidies for US semiconductor manufacturers. Funding from the act has also been earmarked for semiconductor R&D, growing a skilled semiconductor workforce, and incentives for the manufacturing of semiconductors and specialized tooling equipment.
In April, Raimondo said she expected all the grant money under the CHIPS Act to be allocated by the end of this year.
Companies that have so far been awarded funding under the Act include GlobalFoundries, Intel, TSMC, Samsung Electronics, Micron, and GlobalWafers.
