SK Hynix receives $458 million grant for AI chip plant in Indiana

Investing.com -- The U.S. Commerce Department has confirmed the allocation of up to $458 million in government grants to SK Hynix. This funding aims to support the creation of an advanced chip packaging plant and a research and development facility for artificial intelligence products in Indiana.

SK Hynix, a supplier for Nvidia (NASDAQ:NVDA ), announced in April their plans to invest $3.87 billion to construct the West Lafayette facility. The facility will feature an assembly line dedicated to mass-producing next-generation high bandwidth memory chips.

In addition to the grant, the Commerce Department intends to provide $500 million in government loans for the SK Hynix project. The distribution of these grant funds will be contingent upon SK Hynix achieving project milestones.

The department anticipates that the project will create 1,000 jobs and address a crucial gap in the U.S. semiconductor supply chain.

Kwak Noh-Jung, CEO of SK Hynix, the world's second-largest memory chip maker, expressed the company's eagerness to contribute to strengthening the U.S. AI semiconductor supply chain.

In August 2022, the U.S. Congress approved a $39 billion subsidy program for U.S. semiconductor manufacturing and related components. They also authorized $75 billion in government lending.

The Commerce Department is distributing significant grants to the top five semiconductor manufacturers, including TSMC, Intel (NASDAQ:INTC ), Samsung Electronics (KS:005930 ), Micron (NASDAQ:MU ), and SK Hynix.

The department has finalized all of these grants, with the exception of the $6.4 billion award for Samsung.

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Source: Investing.com