SK Hynix to Establish Advanced Semiconductor Plant in Indiana, USA... 5.3 Trillion Won Investment

WSJ Report... "Targeting Operation in 2028"

SK Hynix is reportedly set to invest $4 billion (approximately 5.37 trillion KRW) to build an advanced semiconductor packaging plant in West Lafayette, Indiana, USA.

On the 26th (local time), the Wall Street Journal (WSJ), citing sources, reported that SK Hynix plans to construct the plant with the goal of starting operations in 2028, and that the board of directors is expected to approve the decision soon.

SK Hynix will receive various tax incentives from both federal and state governments. Indiana is also expected to create 800 to 1,000 jobs through the construction of the SK Hynix plant.

West Lafayette, Indiana, where the plant will be located, is home to Purdue University, one of the largest semiconductor and microelectronics programs in the United States. Initially, SK Hynix considered Arizona, where Taiwanese semiconductor company TSMC and Intel plants are located, but ultimately chose Indiana to secure semiconductor experts through Purdue University. Previously, other foreign media outlets reported that SK Hynix had selected Indiana as the site for its semiconductor packaging plant.

SK Hynix dominates the high-bandwidth memory (HBM) semiconductor market, which is essential for artificial intelligence (AI). According to market research firm Semi Analysis, SK Hynix holds a 73% market share in this sector, followed by Samsung Electronics (22%) and Micron (5%). SK Hynix exclusively supplies HBM to Nvidia, which holds a 90% share of the AI semiconductor market.

However, the cost for SK Hynix to build packaging facilities in the United States is estimated to be 30-35% higher compared to Korea. The U.S. government's CHIPS and Science Act (CSA) subsidies are expected to partially offset the additional costs of constructing the local plant.

Dylan Patel, senior analyst at Semi Analytics, observed, "The SK Hynix plant will be the first major facility for large-scale HBM packaging in the United States."

HBM is a high-performance memory that vertically stacks multiple DRAM chips to dramatically increase data processing speeds. High-performance memory like HBM is essential to operate generative AI, which requires rapid and continuous processing of vast amounts of data. SK Hynix holds a 90% market share in the fourth-generation HBM market, HBM3. The fifth-generation HBM, HBM3E, will also be supplied to Nvidia, a leader in AI semiconductors, starting at the end of this month.