SK hynix reportedly planning for a $4 billion chip packaging facility in Indiana — for HBM and other exotic memory types

SK hynix
(Image credit: SK Hynix)

SK hynix is planning to build a $4 billion chip packaging facility in West Lafayette, Indiana, reports the Wall Street Journal. The fab is set to start operations in 2028 and create up to 1,000 jobs. This move, potentially backed by state and federal tax breaks, is part of SK hynix's efforts to strengthen its positions as a manufacturer of non-commodity memory.

The investment in the Indiana facility represents a strategic step for SK hynix to improve its advanced chip packaging capabilities. Such advanced memory packaging technologies could be used to build high-bandwidth memory, which is an important ingredient in many artificial intelligence and high-performance computing applications.

"[SK hynix] is reviewing its advanced chip packaging investment in the U.S., but hasn’t made a final decision yet," a company spokeswoman told the WSJ.

If the project gets the greenlight from SK hynix, the advanced pacakaging facility will start operations in 2028 and will create up to 1,000 jobs. Given the planned cost of the fab — $4 billion — the plant will be one of the world's largest advanced packaging facilities. Government support is crucial for this investment, with possible state and federal tax incentives, the report says. These incentives are part of a larger effort to strengthen the U.S. semiconductor industry and reduce reliance on foreign suppliers.

SK hynix is one of the suppliers of HBM memory to Nvidia, which builds AI GPUs that are vital for powering advanced AI services like ChatGPT. The recently revealed Nvidia Blackwell B200 will use eight HBM3e chips per GPU. This collaboration highlights SK hynix's role in the supply chain of critical components for the AI industry.

The broader context of this investment highlights the U.S. government's efforts to advance domestic chipmaking capabilities using initiatives like the CHIPS and Science Act. This act, which recently provided $8.5 billion in direct government funding to Intel, is instrumental for enhancing the U.S. semiconductor industry's competitiveness, especially amid rising competition and trade wars with China. SK hynix's planned facility in Indiana is a significant development in this context, contributing to the growth and resilience of the U.S. semiconductor sector.

Government funding for various domestic chip manufacturing and packaging endeavors has been a bit sluggish, so the current situation represents more of a statement of intent rather than a finalized deal. Whether it will move on to the construction phase remains to be seen.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • cyrusfox
    The land is cheap enough out in the midwest, but why Indiana? And why a US based packaging facility? Perhaps Chips act money is helping making this a economically feasible, and Intel has New Mexico for packaging.

    I would think the cost of shipping + labor offset by memory margins is a pretty challenging financial prospect. Are they going to be packaging Nvidia AI chips together with their HBM chips? Maybe there is a big enough premium for that to work.
    Reply
  • thestryker
    It certainly makes sense to be expanding advanced packaging and SK Hynix has fabs in NA so it's probably actually dropping some shipping. This is the same reason Intel and others are building advanced packaging facilities in NA.
    Reply
  • Xenogeist
    cyrusfox said:
    The land is cheap enough out in the midwest, but why Indiana? And why a US based packaging facility? Perhaps Chips act money is helping making this a economically feasible, and Intel has New Mexico for packaging.

    I would think the cost of shipping + labor offset by memory margins is a pretty challenging financial prospect. Are they going to be packaging Nvidia AI chips together with their HBM chips? Maybe there is a big enough premium for that to work.
    I'm guessing the Samsung/Stellantis battery plant going up in Kokomo, IN and the Samsung/LG/GM plant being built near South Bend, IN as well as having a large city like Chicago nearby would make northwest Indiana fairly attractive to Korean companies.
    Reply
  • Joseph_138
    I think countries within China's sphere of influence, need to start considering moving their high tech industries abroad, to prevent them from being captured by the Chinese. Not having those industies located in their own countries, makes those countries less atractive to China as takeover targets.
    Reply