US finalizes $458 million award to SK Hynix for US chips packaging facility

By David Shepardson

WASHINGTON (Reuters) - The U.S. Commerce Department on Thursday finalized an award to SK Hynix of up to $458 million in government grants to help fund an advanced chip packaging plant and research and development facility for artificial intelligence products in Indiana.

In April, the Nvidia (NASDAQ:NVDA ) supplier said it would invest $3.87 billion to build the West Lafayette facility which will include an assembly line to mass produce next-generation high bandwidth memory chips. The chips are used in graphic processing units that train artificial intelligence systems.

The department also plans to make available $500 million in government loans for the SK Hynix project. The grant funds would be distributed when SK Hynix meets project milestones.

The project will create 1,000 jobs and fill a key gap in the U.S. semiconductor supply chain, the department said.

Kwak Noh-Jung, CEO of the world's second-largest memory chip maker, said in a statement the company looks forward to working "to build a robust and resilient AI semiconductor supply chain in the U.S."

Congress in August 2022 approved a $39 billion subsidy program for U.S. semiconductor manufacturing and related components along with $75 billion in government lending authority.



The Commerce Department is awarding major grants to all five leading semiconductor manufacturers - TSMC, Intel (NASDAQ:INTC ), Samsung Electronics (KS:005930 ), Micron (NASDAQ:MU ) and SK Hynix. The department has now finalized all of those but the $6.4 billion Samsung award.

This month it finalized a $75 million award to Absolics for constructing a facility in Georgia to supply advanced materials to the country's semiconductor industry. Absolics is an affiliate of SKC, which in turn is part of South Korea's second-largest conglomerate SK Group, as is SK Hynix.

Source: Investing.com