SK Hynix announced that it is going to build a state-of-the-art fabrication plant in the state of Indiana as a part of the Biden administration's plans to be self-sufficient in manufacturing AI chips. In this plant, the South Korean-based chip maker will fabricate HBM stacks which are to be used in Nvidia GPUs made by TSMC, according to two sources who talked to the Financial Times.
Currently, Nvidia gets its chips made by Tawin's TSMC, which sources HBM from SK Hynix that is exclusively fabricated in South Korea. TSMC is also making two advanced packaging plants in Arizona which, once completed, will be doing the same for Nvidia on home soil while sourcing the HBM from its new plant. Kim Yang-Paeng, a researcher at the Korea Institute of Industrial Economics and Trade added, “This is what the US government wanted to see from the beginning and is the result of its recent industrial policy of giving subsidies for localised production.”
Nvidia will also reportedly be using Intel's plants for its GPU's packaging production. The deal is allegedly made for 5,000 wafers per month. As of now, 90% of its production is handled by TSMC, which has also been working on HBM4 integration.
This plant is poised a $22 billion, SK Group Conglomerate's chair Chey Tae-Win during a conference with President Joe Biden. Despite this, SK Hynix told FT, “Our official position is that we are currently considering a possible investment in the US but haven’t made a final decision yet.”
Delays and Concerns with Subsidies Under the CHIPS Act
Existing and upcoming plants in the US are facing challenges and concerns regarding subsidies, resulting in some uncertainty. TSMC is facing challenges causing delays with its new plants. Samsung also delayed the mass production from its Texas foundry and is also concerned that Intel will receive the majority of the subsidies for its plants.
But there's a rising demand for HBM-based chips. For Nvidia to have 'Made in USA' AI chips, it will need both plants to be operational. Having both components be fabricated in the US is also crucial for the current administration, which feels shipping fabricated chips overseas would lead to supply chain and national security risks.
