SK Hynix's U.S. Move: Advanced HBM Factory for AI Chips

On February 2nd, sources report that SK Hynix, a prominent South Korean memory chip manufacturer, is exploring plans to establish a cutting-edge packaging facility in Indiana, USA. The purpose of this facility is to produce High Bandwidth Memory (HBM) chips for seamless integration with NVIDIA's AI GPU, contributing to the localization of AI chip manufacturing in the United States in alignment with the strategic objectives of the Biden administration.

This development follows SK Hynix's intention to build a specialized facility in the U.S. for stacking Standard Dynamic Random Access Memory (DRAM) chips, exclusively dedicated to manufacturing HBM chips. These chips, designed for integration with NVIDIA's GPU, are poised for applications such as the training of expansive models like OpenAI's ChatGPT.

The context is further enriched by TSMC's ongoing investment of $40 billion in the construction of two advanced semiconductor fabs in Arizona, USA. The first phase, a 4nm fab, is anticipated to commence production next year, with NVIDIA planning to relocate a portion of its AI GPU production to TSMC's Arizona facility. SK Hynix's strategic decision to establish an advanced packaging facility in Indiana complements NVIDIA's localization strategy and is congruent with the U.S. administration's focus on fortifying semiconductor manufacturing in the country. This move positions SK Hynix to potentially benefit from subsidies under the U.S. "CHIPS Act."

Kim Yang-paeng, a researcher at the Korea Institute for Industrial Economics and Trade, underscores that SK Hynix's potential establishment of an advanced HBM memory packaging facility in the U.S., in conjunction with TSMC's Arizona fab, signifies a pivotal step towards NVIDIA's enhanced domestic GPU production capabilities.

Insiders from SK Hynix emphasize the surging demand for HBM from U.S. customers and the imperative for close collaboration with chip designers. They assert that the establishment of an advanced packaging facility in the U.S. is a strategic inevitability. Furthermore, integrating SK Hynix's advanced packaging technology more deeply into NVIDIA's supply chain is anticipated to fortify the company's competitive stance against other HBM manufacturers such as Samsung and Micron.

In response to inquiries, an official statement from SK Hynix confirms the company's contemplation of an investment in the United States. However, a final decision on this matter is pending.