The Biden-Harris Administration announced that the U.S. Department of Commerce and SK hynix have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $450 million in proposed federal incentives under the CHIPS and Science Act. This agreement aims to establish a high-bandwidth memory (HBM) advanced packaging fabrication and research and development (R&D) facility.
President Biden signed the bipartisan CHIPS and Science Act to bolster semiconductor manufacturing in the United States, creating jobs and investing in future industries. The proposed investment builds on SK hynix’s commitment of approximately $3.87 billion in West Lafayette, Indiana, for a memory packaging plant for artificial intelligence (AI) products and an advanced packaging R&D facility, expected to create around 1,000 new jobs.
"The Biden-Harris Administration’s CHIPS and Science Act is a once-in-a-generation opportunity to supercharge America’s global technology leadership," said U.S. Secretary of Commerce Gina Raimondo. "Today’s historic announcement with SK hynix would further solidify America’s AI hardware supply chain."
Arati Prabhakar, Assistant to the President for Science and Technology, added, "Advanced packaging is more critical for AI systems but requires precise manufacturing processes. With this incentive from the CHIPS and Science Act, SK hynix will contribute significantly to our complex computing systems."
The West Lafayette plant is part of SK Group's broader multi-billion-dollar investment in American manufacturing announced during a meeting with President Biden in July 2022. The initiative includes investments in EV batteries and biotechnology.
SK hynix's facility at Purdue University Research Park will house an advanced semiconductor packaging line for next-generation HBM chips essential for training AI systems due to their increased processing power. Mass production at this facility is expected by the second half of 2028.
Laurie E. Locascio, Under Secretary of Commerce for Standards and Technology, stated that this investment would advance domestic semiconductor technology commercialization while promoting U.S.-based manufacturing.
The partnership with Purdue University aims to develop future R&D projects focusing on advanced packaging and heterogeneous integration through collaborations with various research institutes and industry partners.
SK hynix CEO Kwak Noh-Jung expressed appreciation for the Department of Commerce's support: "We are moving forward with constructing the Indiana production base...to ultimately supply leading-edge AI memory products from West Lafayette."
In addition to direct funding up to $450 million, up to $500 million in proposed loans may be available under the non-binding PMT as part of the $75 billion loan authority provided by the CHIPS and Science Act.
CHIPS for America aims to protect economic security by restoring American leadership in semiconductor manufacturing through over $30 billion allocated for domestic factory construction. This initiative is projected to unlock over $300 billion in public-private investment while creating more than 100,000 jobs.
