The United States Commerce Department on Thursday, December 19, finalized an award for South Korean semiconductor manufacturer SK Hynix in the form of government grants worth up to $458 million.
The mentioned funds will be spent for two purposes. Part of the money is intended to finance an advanced chip packaging plant. The other part of the funds will be invested in the facility for research and development of artificial intelligence products. The mentioned functional objects are located in Indiana.
SK Hynix is the Nvidia supplier. Nvidia is developing the most popular graphics processing units currently needed for training and ensuring the process of subsequent operation of artificial intelligence systems.
In April, the South Korean manufacturer announced its intention to invest $3.87 billion in a project to build a facility in West Lafayette. This production site includes an assembly line for mass-making a new generation of high-bandwidth memory chips. The corresponding microcircuits are used in graphics processing units, which are necessary for training artificial intelligence systems.
The US Commerce Department also plans to allocate $500 million in government loans to finance a project implemented by SK Hynix in the United States. The grant funds will be distributed when the South Korean manufacturer meets the milestones of the project.
Data from the US Commerce Department indicates that the SK Hynix project will create 1,000 jobs. It was also noted separately that this project will fill a key gap in the semiconductor supply chain to the United States.
Kwak Noh-Jung, chief executive officer of the South Korean company, said that the firm looks forward to working to build a robust and resilient artificial intelligence semiconductor supply chain in the US.
It is worth mentioning that in August 2022, Congress approved a program to subsidize the production of semiconductors and related components in the United States. Within the framework of this program, financing of relevant projects in the overall amount of $39 billion is provided. Congress also approved the government lending authority for $75 billion for appropriate purposes.
As part of the mentioned solutions, Washington is strengthening what can be described as technological independence and industrial self-sufficiency. Appropriate actions are of strategic importance against the background of the currently observed increase in geopolitical tensions. One of the forms of manifestations of this process is the consistent deterioration of relations between China and the United States. Washington has restricted the export of advanced chips and equipment for the production of microcircuits to the Asian country. In retaliation, Beijing has banned shipments of certain minerals to the United States. It is also worth mentioning that the experience of the coronavirus pandemic period, when international supply chains were disrupted due to a global emergency, highlighted the importance of technological sovereignty, allowing the country not to face restrictions in production activities against the background of adverse external factors.
The US Commerce Department is awarding major grants to all five leading semiconductor manufacturers, among which, except SK Hynix, TSMC, Intel, Samsung Electronics, and Micron Technology.
As we have reported earlier, SK Hynix to Build Chip Plant in South Korea.
