On August 6, the U.S. Department of Commerce announced that it has signed a preliminary agreement with SK Hynix to provide $450 million in direct financing and a proposed $500 million loan to help establish a chip packaging factory in Indiana. In addition, SK Hynix is expected to receive a 25% tax credit as part of its capital expenditure in the U.S.

In April this year, SK Hynix announced plans to invest approximately $3.87 billion to build an advanced memory chip packaging factory and AI product research and development center in Indiana. One of the advanced production lines at this facility will be used for the mass production of next-generation HBM chips, which are crucial for supporting GPUs required for AI technology.

The Department of Commerce stated that the factory is expected to create around 1,000 jobs and fill a critical gap in the U.S. semiconductor supply chain.

SK Hynix also plans to collaborate with Purdue University and other local research institutions to research and develop next-generation HBM chips. HBM chips are a key component of GPUs and are essential for training AI models. SK Hynix, a dominant player in the HBM chip market, is a major supplier to NVIDIA, which controls approximately 80% of the global AI chip market.

Analysts suggest that the U.S. funding aims to consolidate its leadership in the AI chip industry, revitalize its domestic chip industry, improve the AI supply chain, and reduce dependence on the Asian region, hence the frequent large-scale funding of foreign companies to build factories in the U.S. Previously, the Biden administration approved billions of dollars in grants to Samsung Electronics, Intel, and TSMC to ensure a stable supply of semiconductors.

In August 2022, the U.S. Congress approved a $39 billion subsidy program under the CHIPS and Science Act for semiconductor and related component manufacturing in the U.S., and authorized $75 billion in government loans.

U.S. Secretary of Commerce Gina Raimondo stated that the Department of Commerce has signed letters of intent for $30 billion in investment funds with 15 companies, which is expected to "leverage an additional $300 billion in private capital." Additionally, the U.S. has secured significant investment commitments from five leading semiconductor manufacturers (TSMC, Intel, Samsung Electronics, Micron, and SK Hynix).

This also means that the U.S. will have the most secure and diverse advanced semiconductor supply chain in the world, with no other economy having more than one company producing advanced chips domestically.

SK Hynix CEO Kwak Noh-Jung said, "The construction of the Indiana production base is progressing steadily, and this new AI technology center will create a stronger and more resilient supply chain for the global semiconductor industry."

States will have the world's safest and most diverse supply chain for advanced semiconductors, and no other economy will have more than two companies producing cutting-edge chips locally.。

Kwak Noh-Jung, CEO of SK Hynix, said: "The construction of the Indiana production site is progressing steadily, and this new AI technology center will create a stronger and more flexible supply chain for the global semiconductor industry.。"