According to South Korean technology outlet ZDNet Korea, SK hynix is reviewing plans to build its first 2.5D advanced packaging mass production line in the US, a move that would deepen the South Korean memory maker's role in supplying memory for artificial intelligence systems.
The company is considering installing the advanced manufacturing capabilities at its planned facility in West Lafayette, Indiana, following a multibillion-dollar investment commitment and federal incentives aimed at bolstering the domestic semiconductor supply chain.
The proposed Indiana site represents the first American factory for SK hynix and is designed to serve as a strategic hub for advanced AI memory products. The company previously announced a US$3.87 billion investment for the project with a target for mass production to begin in the second half of 2028. While the facility was originally intended for high-bandwidth memory, the inclusion of a 2.5D line would allow the company to handle more complex integration tasks that are typically handled by external packaging partners and foundries.
Technological shift
Advanced 2.5D packaging is a critical component in the manufacturing of modern AI accelerators. The process uses a silicon interposer to link high-bandwidth memory with high-performance processors such as graphics processing units and central processing units. This architecture improves data transfer speeds and power efficiency, making it a standard requirement for hardware supplied to customers such as Nvidia. Although SK hynix leads the global market for high-bandwidth memory, advanced 2.5D packaging for AI systems is largely dominated by TSMC.
Securing in-house 2.5D packaging capabilities would allow SK hynix to improve the reliability and production schedules of its next-generation products. High-bandwidth memory must undergo rigorous system-level quality testing during the packaging phase.
Industry sources noted that identifying defects at this late stage can cause shipment delays and complicate responsibility across different suppliers. By managing more of the packaging process internally, the company could mitigate these risks and strengthen its relationships with major AI chip designers.
CHIPS Act funding
The expansion aligns with the US government's efforts to localize semiconductor manufacturing through the CHIPS and Science Act. The Semiconductor Industry Association said the West Lafayette project was approved by the US Department of Commerce in December 2024, securing US$458 million in federal grants and up to US$500 million in loans.
Beyond manufacturing, the investment is expected to support research into heterogeneous integration and future generations of memory. SK hynix plans to partner with Purdue University on research and development initiatives through the Birck Nanotechnology Center and other affiliated institutes, according to project details released by US authorities.
Technical challenges
Despite the scale of the investment, the project faces execution risks. Large-scale system-in-package equipment capable of supporting AI accelerators with stacked memory is complex and capital-intensive. Industry observers said SK hynix has so far focused most of its advanced packaging work on research and pilot production rather than high-volume manufacturing. The company said it is reviewing multiple options for the Indiana site and that no final decisions on the facility's configuration have been made.
Article edited by Jerry Chen
