SK Hynix reportedly planning new packaging facility for HBM in the US

Daniel Chiang, Taipei, DIGITIMES Asia 0

Following the plan to construct an advanced semiconductor packaging facility in Indiana, United States, SK Hynix recently detailed its site selection in West Lafayette, as reported by The Wall Street Journal (WSJ). The total investment scale is approximately US$4 billion, targeting the demand for Nvidia's High Bandwidth Memory (HBM).

According to reports from WSJ and South Korean media ZD Net Korea, SK Hynix plans to invest US$4 billion to build a semiconductor packaging plant in West Lafayette, Indiana. It is expected to be operational by 2028, with the board expected to approve the decision shortly. SK Hynix's packaging facility in the United States is situated near the renowned Purdue University and is expected to create around 800 to 1,000 job opportunities.

SK Hynix's packaging facility in Indiana will be responsible for supplying the HBM required for Nvidia GPUs. SK Hynix exclusively supplied Nvidia HBM3 in 2023 and is also expected to supply HBM3E starting from the end of March 2024. Establishing a facility in the United States will facilitate closer customer service and maintain competitiveness in the HBM market.

Industry expectations suggest that SK Hynix will receive various support, including tax incentives from Indiana and the US federal government. According to the Semiconductor Industry Research Institute, the cost of constructing packaging facilities in the United States is about 30-35% higher than in South Korea, and it is hoped that various forms of financial support from the US government will help offset these costs.

Additionally, according to WSJ, the Biden Administration, in efforts to expand domestic semiconductor production in the United States, has allocated at least US$30 billion to the packaging sector in the semiconductor subsidy under the Chips Act. The deadline for subsidy applications is April 12th.

Regarding these rumors, SK Hynix stated that while discussions are ongoing regarding the advanced semiconductor packaging project in the United States, no final decision has been made yet.

SK Hynix's CEO Kwak Noh-jung stated in February 2024 that while it's uncertain whether they can decide on the site for the US packaging factory within 2024, they will spare no effort to do so. The company is carefully considering various options, and all states in the United States are candidates.