U.S. Commerce Boosts SK Hynix with $450M Grant for AI Chip Facility

The U.S. Commerce Department plans to grant SK Hynix up to $450 million for an advanced packaging plant in Indiana, focusing on AI products. The facility will create 1,000 jobs, enhance the U.S. semiconductor supply chain, and includes a $500 million loan opportunity and a 25% investment tax credit.

The U.S. Commerce Department announced on Tuesday its decision to award SK Hynix up to $450 million in grants for an advanced packaging plant in Indiana that will focus on artificial intelligence products.

In April, SK Hynix, the world's second-largest memory chip maker, committed to a $3.87 billion investment for the facility, which will feature an advanced chip production line. These high-bandwidth memory chips are crucial for training AI systems, mainly used in graphic processing units, according to supplier Nvidia. Additionally, the department plans to offer $500 million in government loans for the project, which is expected to receive a 25% investment tax credit.

This new facility will create 1,000 jobs and address a significant gap in the U.S. semiconductor supply chain. The grant is part of a broader $39 billion subsidy program approved by Congress in August 2022, aiming to bolster U.S. semiconductor manufacturing and add $75 billion in government lending authority. Commerce Secretary Gina Raimondo stated that announced term sheets with 15 companies would unlock $300 billion in private capital, further solidifying the U.S. as a global leader in advanced semiconductor technology.

(With inputs from agencies.)