The U.S. Department of Commerce finalized a CHIPS Incentives Award with SK hynix on December 19, 2024, providing up to $458 million in direct funding for the company’s planned facilities in West Lafayette, Indiana. SK hynix will invest approximately $3.87 billion to construct a memory packaging plant for AI products and an advanced packaging fabrication and research and development facility at the same location. The CHIPS Program Office will also provide up to $500 million in loans to SK hynix under the award. A preliminary memorandum of terms had been announced on August 6, 2024.
What it means
The award funds two facilities in West Lafayette: a memory packaging plant oriented toward AI products and an advanced packaging fabrication and R&D facility. SK hynix, which the Commerce Department described as the world’s leading producer of high-bandwidth memory, will partner with Purdue University to establish a research hub in Indiana as part of the investment. The Department said approximately 1,000 new facility jobs and hundreds of construction jobs are expected to result. Funds will be disbursed based on completion of project milestones. The $500 million in loans draws on the $75 billion loan authority established by the CHIPS and Science Act. Secretary of Commerce Gina Raimondo said the investment is “solidifying America’s AI hardware supply chain” and that the Purdue partnership would give Indiana “an important role in advancing U.S. economic and national security.” SK hynix CEO Kwak Noh-Jung said the company looks forward to building “a robust and resilient AI semiconductor supply chain in the U.S.” in collaboration with the federal government, Indiana, Purdue University, and U.S. business partners.
The SK hynix award is part of a broader CHIPS for America effort that has now distributed over $26 billion of the more than $36 billion in proposed incentives funding allocated to date across 21 states, with those announcements collectively expected to create over 125,000 jobs. The Commerce Department also noted that semiconductor and electronics companies have announced over $450 billion in private investments since the start of the Biden-Harris Administration.
Key facts
- Up to $458 million — direct CHIPS Incentives funding awarded to SK hynix
- Up to $500 million — CHIPS Program Office loans to SK hynix, drawn from the CHIPS and Science Act’s $75 billion loan authority
- ~$3.87 billion — SK hynix’s total planned investment in West Lafayette, Indiana (according to the company)
- Facilities: memory packaging plant for AI products and advanced packaging fabrication and R&D facility, both in West Lafayette, Indiana
- ~1,000 new facility jobs and hundreds of construction jobs expected (according to the company)
- Partner: Purdue University, for a research hub in Indiana
- Preliminary memorandum of terms announced August 6, 2024; award finalized December 19, 2024
- CHIPS for America has awarded over $26 billion of more than $36 billion in proposed incentives funding across 21 states
Source: U.S. Department of Commerce / NIST CHIPS Program Office news release (nist.gov)