U.S. Approves $458M CHIPS Act Subsidy for SK Hynix

According to reports, the U.S. Department of Commerce has reached an agreement to provide SK Hynix with up to $458 million in grants and a $500 million loan to support its advanced chip packaging facility in Indiana. This initiative is a key part of the United States' efforts to strengthen its domestic semiconductor supply chain.

The final contract amount slightly exceeds the preliminary agreement announced in August, meaning the South Korean company can begin receiving funding once its project meets the negotiated benchmarks.

SK Hynix's $3.87 billion facility will focus on packaging chips that are transported from its home base in South Korea to the U.S. The company stated that this investment is part of a broader commitment, which includes up to $15 billion for U.S. packaging and other research projects.

As one of the top three manufacturers of high-bandwidth memory (HBM), a critical component for developing artificial intelligence (AI) software, SK Hynix is a leader in the launch of new chips, surpassing its competitor Samsung Electronics. The company also serves as a major supplier for Nvidia. While SK Hynix will continue chip production in Asia, its expansion into U.S.-based chip packaging demonstrates its intention to diversify its geographic footprint.

Domestic packaging capabilities have been a focal point for officials implementing the CHIPS Act of 2022, a groundbreaking bipartisan initiative that has already prompted companies to commit over $400 billion in investments. Gina Raimondo, U.S. Secretary of Commerce, oversees the allocation of $39 billion for manufacturing grants and $11 billion for research funding. She aims to finalize as many agreements as possible before her term ends in January 2025.

Raimondo stated, "By investing in SK Hynix, a global leader in high-bandwidth memory chip production, and its collaboration with Purdue University, we are solidifying the U.S. AI hardware supply chain in a way unmatched by any other country. This will create hundreds of jobs in Indiana and ensure that the state plays a crucial role in advancing both the U.S. economy and national security."