SK Hynix begins US chip plant construction, betting on 'Made in USA' HBM

SK Hynix has broken ground on its first semiconductor manufacturing facility in the United States, a significant investment in Indiana aimed at producing advanced High Bandwidth Memory (HBM) chips. The construction site in West Lafayette, Indiana, formerly farmland, is now a hive of activity with concrete pillars and rebar rising for the future cleanroom. Project leaders note the foundational differences in construction compared to South Korea, requiring more robust and numerous support structures due to the lack of bedrock. "It's different from the start," said Kim Hyun-joong, construction team leader for the Indiana fab project, pointing to the ground. In Korea, semiconductor plant foundations are anchored in solid bedrock. In Indiana, where bedrock is scarce, more and thicker piles must be driven deeper into the soil. SK Hynix plans to invest over $4 billion in the Indiana fab, which will house an advanced packaging production line and research and development facilities. The US government is supporting the project with $458 million in grants and up to $500 million in loans through the CHIPS Act. This facility is crucial for SK Hynix's strategy to establish Indiana as a central hub for 'Made in USA' HBM production, with plans for annual production capacity in the hundreds of thousands of units. However, the Indiana fab represents an advanced packaging facility, focusing on the back-end process of assembling chips. This differs from the US government's broader push for domestic manufacturing of the entire chip production process, including front-end wafer fabrication. SK Hynix's approach is akin to producing an engine and key components in Korea and then assembling the final product in the US. The company is prioritizing localization in its construction efforts, with an American firm handling the basic construction and a commitment to using American-made materials whenever possible. This project is seen as a test case for SK Hynix's future investments in the US, providing opportunities to build a local workforce, establish supply chains, and gain experience collaborating with local partners.

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It's different from the start.