The Department of Commerce (DoC) announced today it has reached a preliminary agreement with SK hynix for up to $450 million in proposed direct funding under the CHIPS and Science Act to build a high-bandwidth memory (HBM) packaging plant for AI products and an advanced packaging research and development (R&D) facility.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
The preliminary funding deal would support SK hynix’s investment of nearly $4 billion and 1,000 jobs in in West Lafayette, Ind. The plant – located at Purdue University – will provide full end-to-end advanced packaging for the world’s most advanced semiconductors to be used in high-performance computing, AI, communications, and more.
“The Biden-Harris Administration’s CHIPS and Science Act is a once-in-a-generation opportunity to supercharge America’s global technology leadership and create quality jobs in the process. Today’s historic announcement with SK hynix would further solidify America’s AI hardware supply chain in a way no other country on earth can match, with every major player in advanced semiconductor manufacturing and packaging building or expanding on our shores,” said Secretary of Commerce Gina Raimondo.
With this announcement, the United States will have preliminary agreements with all five of the world’s leading-edge logic, memory, and advanced packaging providers. No other economy in the world has more than two of these companies producing leading-edge chips on its shores, DoC said.
Through the proposed CHIPS investment in South Korea-based SK Hynix – the world’s leading producer of HBM – the Biden-Harris administration would take a meaningful step in advancing the security of the U.S. AI supply chain.
SK hynix’s new facility at Purdue will be home to an advanced semiconductor packaging line that will mass-produce next generation HBM, DoC said. These high-performance memory chips are crucial components of graphics processing units that train AI systems due to their increased processing power. Mass production at the facility is expected to begin in the second half of 2028.
“With proposed investments in companies like SK hynix, the United States has the opportunity to be the only country in the world where every company capable of producing leading-edge chips will have both a high-volume manufacturing presence and a significant research and development presence,” said National Institute of Standards and Technology Director Laurie Locascio.
According to DoC, SK hynix will collaborate with Purdue University on plans for future R&D projects, including memory-centric solutions and architecture for generative AI. As part of its workforce development efforts, SK hynix plans to work with Purdue University and Ivy Tech Community College to develop training programs and interdisciplinary degree curricula that will cultivate a high-tech workforce and build a reliable pipeline of new talent.
“President Biden and Vice President Harris are bringing the most advanced semiconductor manufacturing back to the United States,” said Arati Prabhakar, director of the White House Office of Science and Technology Policy. “Advanced packaging is more and more critical for AI and other leading-edge systems, but it requires extremely precise manufacturing processes. With this incentive from the CHIPS and Science Act, SK hynix will make a major contribution to the complex computing systems that our nation relies on. At the same time, we are making the R&D investments to win the future, too.”
