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South Korea’s SK Hynix announced plans to invest $3.9 billion in an advanced chip-packaging facility in West Lafayette, Indiana, marking a significant development for the Midwestern states in the American semiconductor industry.
This new facility, focusing on mass-producing high-bandwidth memory (HBM) crucial for powering Nvidia Corp (NASDAQ:NVDA) GPUs that are instrumental in AI systems training, like ChatGPT, aims to start mass production in the second half of 2028, creating over 1,000 jobs.
The investment underscores the region’s growing appeal in the semiconductor sector, fueled by the Biden administration’s efforts to restore America’s global standing in chip manufacturing and the incentives from the $53 billion Chips Act, the Wall Street Journal reports.
Indiana has extended up to $554 million in tax rebates and additional incentives to SK Hynix, highlighting the strategic partnership with Purdue University to foster innovation and job creation.
SK Hynix’s move is part of a broader trend of semiconductor companies seeking geographic diversity and resilience by expanding beyond traditional hubs like Texas, California, and Oregon.
Factors such as the proximity to top engineering universities, lower overall costs, and untapped labor markets in the Midwest have become key attractions.
According to CEO Kwak Noh-Jung, SK Hynix anticipates that its HBM chips, designed for AI chipsets, will account for a significant double-digit percentage of its DRAM chip sales in 2024.
In March, the company started commercializing its next-generation advanced HBM chips, with Nvidia likely being the initial recipient of SK Hynix’s shipments.
SK Hynix’s move to Indiana represents a significant step in the U.S.’s efforts to secure a leading role in semiconductor manufacturing, joining other Asian chip giants like Samsung Electronics Co (OTC:SSNLF) and Taiwan Semiconductor Manufacturing Co (NYSE:TSM) in establishing a significant manufacturing presence in the U.S.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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