The U.S. Department of Commerce and SK hynix have signed a non-binding preliminary memorandum of terms (PMT) to provide up to $450 million in proposed federal incentives under the CHIPS and Science Act. This funding aims to establish a high-bandwidth memory (HBM) advanced packaging fabrication and research and development (R&D) facility in West Lafayette, Indiana. This project is part of SK hynix's broader $3.87 billion investment to build a memory packaging plant for AI products and an advanced packaging R&D facility, creating approximately 1,000 new jobs and filling a critical gap in the U.S. semiconductor supply chain.
The proposed investment by the U.S. Department of Commerce is a significant step in enhancing the security of the U.S. AI supply chain. This initiative will enable the mass production of next-generation HBM chips, which are essential components for AI systems. The West Lafayette facility, located at Purdue University Research Park, will support the production of high-performance memory chips that significantly enhance the processing power of graphics processing units (GPUs). Mass production at this facility is expected to begin in the second half of 2028.
This partnership with Purdue University will establish a research hub in Indiana, advancing HBM and packaging R&D in the U.S. The collaboration will involve advanced packaging and heterogeneous integration projects, workforce development programs, and support for local community development initiatives. Additionally, SK hynix plans to claim the Department of the Treasury’s Investment Tax Credit and utilize up to $500 million in proposed loans under the CHIPS Program Office.
- Funding: Up to $450 million in federal incentives under the CHIPS and Science Act.
- Investment: SK hynix's $3.87 billion investment in West Lafayette, Indiana.
- Jobs Created: Approximately 1,000 new jobs.
- Facility: Advanced packaging fabrication and R&D at Purdue University Research Park.
- Production Start: Mass production expected in the second half of 2028.
- Tax Credit: SK hynix plans to claim up to 25% of qualified capital expenditures.
- Proposed Loans: Up to $500 million in loans from the CHIPS Program Office.
“We deeply appreciate the U.S. Department of Commerce’s support and are excited to collaborate in seeing this transformational project fully realized,” said SK hynix CEO Kwak Noh-Jung. “We are moving forward with the construction of the Indiana production base, working with the State of Indiana, Purdue University and our U.S. business partners to ultimately supply leading-edge AI memory products from West Lafayette. We look forward to establishing a new hub for AI technology, creating skilled jobs for Indiana and helping build a more robust, resilient supply chain for the global semiconductor industry.”
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