December 19, 2024
The U.S. Department of Commerce announced on Thursday that it has finalized a grant of up to $458 million to SK Hynix to support the development of an advanced chip packaging facility and a research and development center in Indiana. The project aims to enhance the production of semiconductor components essential for artificial intelligence technologies.
In April, SK Hynix, a major supplier to Nvidia, revealed plans to invest $3.87 billion in constructing the West Lafayette facility. The plant will feature a production line dedicated to manufacturing next-generation high-bandwidth memory chips, critical for training AI systems through graphics processing units.
In addition to the grant, the Commerce Department intends to provide $500 million in government loans to support the project. The grant funds will be disbursed as SK Hynix achieves specific project milestones.
The initiative is expected to create 1,000 jobs and address a significant gap in the U.S. semiconductor supply chain, according to the Commerce Department. Kwak Noh-Jung, CEO of SK Hynix, expressed the company’s commitment to collaborating with the U.S. to establish a robust and resilient AI semiconductor ecosystem.
This development follows Congress’ approval of a $39 billion subsidy program for U.S. semiconductor manufacturing and related industries in August 2022, alongside $75 billion in government lending authority. The Commerce Department is allocating major grants to five leading semiconductor manufacturers: TSMC, Intel, Samsung Electronics, Micron, and SK Hynix. While grants for most companies have been finalized, a $6.4 billion award for Samsung remains pending.
Additionally, the Commerce Department recently finalized a $75 million grant to Absolics for building a facility in Georgia to supply advanced materials for the U.S. semiconductor industry. Absolics is affiliated with SKC, a subsidiary of South Korea’s SK Group, which also owns SK Hynix.