SK Hynix Receives Major Grant for AI Chip Facility

By David Shepardson

WASHINGTON (Reuters) – The U.S. Commerce Department has finalized an award of up to $458 million in government grants to SK Hynix to support the development of an advanced chip packaging plant and R&D facility for artificial intelligence products in Indiana.

In April, Nvidia's supplier announced a $3.87 billion investment to establish the West Lafayette facility, featuring an assembly line to mass produce next-generation high bandwidth memory chips utilized in graphic processing units for training AI systems.

Additionally, the department plans to offer $500 million in government loans for the SK Hynix project. Funds will be disbursed as SK Hynix meets specific project milestones.

The initiative promises to create 1,000 jobs and address critical gaps in the U.S. semiconductor supply chain. CEO Kwak Noh-Jung of SK Hynix expressed eagerness in establishing a robust AI semiconductor supply chain in the U.S.

In August 2022, Congress sanctioned a $39 billion subsidy program for U.S. semiconductor manufacturing along with $75 billion in government lending authority.

The Commerce Department is also allocating significant grants to leading semiconductor manufacturers, including TSMC, Intel, Samsung Electronics, and Micron, with most awards finalized except for the $6.4 billion Samsung award. Recently, a $75 million grant was approved for Absolics to build a facility in Georgia to supply advanced materials for the semiconductor industry; Absolics is affiliated with SKC, part of South Korea's SK Group.