South Korean SK Hynix Inc. is set to receive initial grants for $ 450 million and loans for $500 million for the implementation of a project to build an advanced chip packaging plant and a research facility in the US state of Indiana.
The implementation of the mentioned project will strengthen the potential of the United States in the most important artificial intelligence supply chain. It is worth noting that AI is currently what corresponds to such a concept as the main technology of modernity. Also, artificial intelligence is gradually becoming the major driving force of progress at the current stage of the development of human civilization. Against the background of relevant realities, the country’s access to advanced solutions in the area of machine intelligence is likely to be crucial for its economic prospects in the foreseeable future. Also, most likely, artificial intelligence will eventually determine the strength of the state’s political positions at the global level. This assumption is explained by the fact that access to advanced technologies is not a formal privilege, but a specific practical opportunity to improve productivity in the broad sense of the corresponding concept and modernize many spheres of activity. The appropriate prospects for the future actualize the need for technological sovereignty. The ability of the State to autonomously provide for itself in the advanced segment of the manufacturing sector is a critically important indicator, especially in the context of perspectives. Technological sovereignty is also important against the background of increasingly clearly observed signs of turbulence in the space of geopolitical relations. In this context, localization of production, which Washington is currently engaged in, is one of the priority actions.
The media reports that the package of high-bandwidth memory chips will be carried out at the SK Hynix production site in Indiana. As part of the operation of this plant, the South Korean company will cooperate with the developers of microcircuits necessary for the training and subsequent operation of artificial intelligence systems. The media reports that SK Hynix, in particular, will interact with Nvidia, one of the main beneficiaries of the so-called AI boom, whose market capitalization exceeded the $3 trillion mark this summer. It is worth noting that currently, the South Korean company is one of the world’s main manufacturers of high-bandwidth memory chips. The media reports that the cost of the above-mentioned plant in Indiana is $3.87 billion.
SK Hynix is also expected to supply its own memory chips from South Korea to a manufacturing site in the United States. The relevant information was published by the media with reference to the Commerce Department official, who provided the data to journalists on condition of anonymity.
It is expected that about 1,000 people will work at the Indiana production site. In addition to grants and loans, SK Hynix also expects that it has been able to take advantage of tax benefits of 25%. It is worth noting that Washington has provided corresponding benefits to other companies building factories in the United States.
SK Hynix aims to increase its leadership over Samsung Electronics Co. and Micron Technology Inc. in the high-bandwidth memory chip supply area for Nvidia. It is worth noting that the relevant activity of the mentioned manufacturer has already generated a result in the form of a doubling of the market value since the end of 2022.
The opinion is circulating among experts that packaging, the process of encasing chips and preparing them to be connected to devices, has already become the territory of technological confrontation between the United States and China.
The provision of funds to SK Hynix is the 15th preliminary agreement under the Chips and Science Act 2022. This initiative of Washington provides for the allocation of grants for $ 39 billion and another $75 billion in loans and guarantees. The US also provides 25% tax credits to revitalize the local chip industry after shifting production abroad for many years.
The administration of the President of the United States Joe Biden has already announced the allocation of funds to five leading global manufacturers of microcircuits, including SK Hynix, Samsung, Micron, Intel Corp., and Taiwan Semiconductor Manufacturing Co.
Besides Nvidia, SK Hynix’s clients also include such technology giants as Apple Inc., Microsoft Corp., and Alphabet Inc. Initially, the South Korean manufacturer announced its intention to invest up to $15 billion in packaging and research projects in the United States. In addition to Indiana, the company was also considering building its first US plant in Arizona. It is worth noting that the mentioned region has already received major investments from Intel and TSMC. Amkor Technology Inc., another packaging company, is also currently under construction manufacturing site in Arizona.
US Commerce Secretary Gina Raimondo, speaking with reporters this week, said that the United States will have the world’s most secure and diverse supply chain of advanced semiconductors that power artificial intelligence.
As we have reported earlier, SK Hynix to Build Chip Plant in South Korea.
