US Department of Commerce Ropes in SK Hynix to Bolster AI Supply Chain Security

The U.S. Department of Commerce and SK hynix have entered into an agreement to establish a high-bandwidth memory (HBM) advanced packaging fabrication and research and development (R&D) facility.

Under the CHIPS and Science Act, the South Korean semiconductor company will receive $450 million in federal incentives.

“Today’s historic announcement with SK hynix would further solidify America’s AI hardware supply chain in a way no other country on earth can match, with every major player in advanced semiconductor manufacturing and packaging building or expanding on our shores,” U.S. Secretary of Commerce Gina Raimondo, said in a press release.

President Biden’s bipartisan CHIPS and Science Act aims to rejuvenate U.S. semiconductor manufacturing, bolster the domestic supply chain, create well-paying jobs, and drive investments in future industries. 

This proposed CHIPS investment will complement SK hynix’s $3.87 billion commitment to build a memory packaging plant and an advanced packaging R&D facility in West Lafayette, Indiana. 

The project is expected to generate around 1,000 new jobs and address a crucial gap in the U.S. semiconductor supply chain.

In the press release, the Commerce also revealed that with the SK hynix announcement, the US will have preliminary agreements with all five of the world’s top providers of cutting-edge logic, memory, and advanced packaging technologies. 

No other country has more than two of these companies manufacturing leading-edge chips within its borders.

By allocating over $30 billion in proposed funding to build factories domestically and proposing to invest billions more in research and innovation, the Biden administration plans to unlock over $300 billion in public and private investment and create more than 100,000 jobs.