US to Provide SK Hynix with $660 Million Subsidy (Comprehensive)

720 Billion Government Loan Support
Construction of Semiconductor Packaging Production Base in Indiana

The Joe Biden administration in the United States has signed a contract to provide SK Hynix with direct subsidies worth approximately 660 billion won under the Chips Act.

On the 19th (local time), the U.S. Department of Commerce announced that it had finalized a contract to provide SK Hynix with direct subsidies of $458 million (about 663.3 billion won) and government loans of $500 million (about 724.2 billion won).

Yonhap News

The initially announced subsidy amount for SK Hynix by the U.S. government in August was around $450 million, and the contract was signed at a slightly higher amount.

SK Hynix has announced plans to invest $3.87 billion to build an advanced packaging production base for artificial intelligence (AI) memory in West Lafayette, Indiana. The subsidy will be used to support the construction of this plant.

U.S. Secretary of Commerce Gina Raimondo said, "The bipartisan Chips Act continues to strengthen America's global technology leadership by investing in companies like SK Hynix and communities like West Lafayette," adding that through this support, "we are strengthening America's AI hardware supply chain in a way no other country can match."

The U.S. Department of Commerce stated that this investment is expected to create 1,000 new manufacturing jobs and hundreds of construction jobs.

Donald Trump, the U.S. President-elect set to take office on January 20 next year, is negative about providing subsidies under the Chips Act. The Biden administration is accelerating the finalization of subsidies ahead of Trump's inauguration.

Previously, the five major semiconductor manufacturers?Samsung Electronics, SK Hynix, TSMC, Intel, and Micron?announced plans for facility investments in the U.S. Among them, the subsidy amounts for four companies except Samsung Electronics have been finalized.

Samsung Electronics is negotiating with the U.S. government after signing a preliminary memorandum of understanding to invest $45 billion in the U.S. by 2030 and receive $6.4 billion in subsidies.