The U.S. Department of Commerce has finalized a $458 million direct funding grant for SK Hynix to build a $3.87 billion packaging plant and R&D facility in West Lafayette, Indiana. Additionally, SK Hynix is eligible for a $500 million loan, both funded by the CHIPS Act.
Boosting US Semiconductor Supply Chain
The facility aims to address a "critical gap" in the U.S. semiconductor supply chain, particularly for AI products. It will enable the manufacturing of HBM chips within the United States, a crucial component for advanced AI chip production. With TSMC also operating an Arizona fab, the U.S. could potentially produce the majority of components for its most advanced chips within its own borders.
Job Creation and Research
The project is expected to create a thousand new jobs in Indiana and drive research and development through a partnership with nearby Purdue University.
Statements from Officials
“By investing in companies like SK hynix and communities like West Lafayette, the bipartisan CHIPS and Science Act continues to supercharge America’s global technology leadership,” said Commerce Secretary Gina Raimondo.
“With this investment in SK hynix – the world’s leading producer of high-bandwidth memory chips – and their partnership with Purdue University, we are solidifying America’s AI hardware supply chain in a way no other country on Earth can match," stated Raimondo. "Creating hundreds of jobs in Indiana, and ensuring the Hoosier State plays an important role in advancing U.S. economic and national security.”
Political Considerations
Many companies are seeking CHIPS Act funding before the end of the current presidential administration, amid rumors that the incoming administration may alter or discontinue the program. Whether this program continues under the new administration is yet to be determined, but several companies are aiming to finalize grants as soon as possible.
