SK Hynix to Receive 620 Billion KRW Subsidy in the US... Boosting HBM Production

Indiana Packaging Plant Support Fund
$500 Million Loan, Up to 25% Tax Benefits

SK Hynix will receive semiconductor subsidies worth up to $450 million (approximately 620 billion KRW) from the U.S. Department of Commerce. The support is related to the construction of a packaging plant in Indiana, and SK Hynix is expected to accelerate the establishment of a next-generation high-bandwidth memory (HBM) production base locally.

On the 6th (local time), the U.S. Department of Commerce announced that it had signed a preliminary memorandum of transaction (PMT) centered on a direct subsidy of up to $450 million and loan support of $500 million (approximately 690 billion KRW) for SK Hynix's semiconductor packaging production base investment in Indiana.

Separately, the U.S. Department of the Treasury has also decided to provide up to a 25% tax benefit on SK Hynix's local investment amount. The subsidy contract will be finalized following the detailed support plan (NOFO) procedure under the U.S. Department of Commerce Semiconductor Act fiscal incentives.

On the 5th, Chey Tae-won, Chairman of SK Group, visited the SK Hynix Icheon Campus in Icheon, Gyeonggi Province, to inspect the HBM production site along with key executives of SK Hynix.
[Photo by SK Supex Council] [Image source=Yonhap News]

Earlier, SK Hynix announced that it would invest $3.87 billion (approximately 5.2 trillion KRW) in West Lafayette, Indiana, to build an advanced packaging production base and research and development (R&D) facilities for AI memory. The plan is to complete the factory by 2028 and start producing next-generation HBM and other AI memories in the second half of the same year. This plant will also be SK Hynix's first factory built in the United States.

With the subsidy amount decided, the construction of the Indiana packaging plant is expected to accelerate. SK Hynix plans to strengthen its technological leadership through advanced packaging, which has become increasingly important due to the rapid surge in demand for ultra-high-performance memory such as HBM. In particular, from the 6th generation HBM (HBM4), demand for customized products is expected to grow further, and the Indiana plant is likely to serve as a base for expanding collaboration with big tech companies.

In a statement released after the preliminary subsidy decision, SK Hynix said, "We express our deep gratitude for the support from the U.S. government. We will do our utmost to comply with the remaining procedures until the subsidy is finally confirmed," adding, "We will proceed with construction work to ensure smooth mass production of AI memory products at the Indiana production base and strive to contribute to revitalizing the global semiconductor supply chain."

The Biden administration enacted the CHIPS and Science Act in 2022 to revive the U.S. semiconductor industry. It provides $39 billion in subsidies, $75 billion in loans and guarantees, and a 25% tax credit to companies building new semiconductor factories in the United States. So far, semiconductor companies receiving subsidies for local factory establishment under the U.S. CHIPS Act include the world's top five chip manufacturers: Taiwan's TSMC ($6.6 billion), Samsung Electronics ($6.4 billion), Intel ($8.5 billion), Micron Technology ($6.1 billion), and SK Hynix.