SK hynix US HBM Production Hub to Commence 2029 Output
South Korean chipmaker SK hynix has begun construction on its advanced packaging facility in Indiana, investing over $4 billion. The plant will produce next-generation High Bandwidth Memory for AI applications, with mass production slated for the second half of 2029, aiming to supply US technology firms.
Indiana Facility Targets AI Memory
South Korean chipmaker SK hynix recently commenced construction on its advanced packaging facility in Indiana, USA. The company commits over $4 billion to this new High Bandwidth Memory (HBM) production hub. This facility will produce memory specifically for artificial intelligence (AI) applications.
SK hynix plans to open its cleanroom by October 2028, with mass production of next-generation HBM scheduled for the second half of 2029. The company projects an annual output of hundreds of thousands of wafers from this site. This represents SK hynix's first US-based next-generation HBM production site.
Focus on HBM4E and R&D Collaboration
The Indiana fab will focus on seventh-generation HBM4E chips, rather than the current HBM4, according to SK hynix CEO Kwak Noh-Jung. This decision aligns with Nvidia's plans for enhanced AI accelerator performance. SK hynix previously confirmed sample shipments of HBM4E chips to customers, with development on schedule.
Wafers produced in South Korea will ship to Indiana for advanced packaging and testing, before US-made products supply American technology companies like Nvidia. An advanced packaging research and development testbed will also be built, enabling collaboration with customers, universities, and partners on packaging technologies.
Government Support Under CHIPS Act
The groundbreaking ceremony, held at Purdue University, saw attendance from senior Korean and US officials, including Korean Ambassador Kang Kyung-wha, Indiana Governor Mike Braun, and US Senator Todd Young. SK Group Vice Chairman Yu Jeong-Joon and SK hynix CEO Kwak Noh-Jung also participated.
CEO Kwak stated the project builds a "new future for AI in the United States," strengthening the US semiconductor supply chain. The US Commerce Department allocated up to $458 million in direct funding and $500 million in loans to SK hynix in December 2024. This support falls under the CHIPS and Science Act, a key driver for SK hynix's US investment plans.
This US production base diversifies SK hynix's global manufacturing footprint, reducing reliance on Asian facilities for US-bound HBM. For Asian semiconductor firms, this move demonstrates the increasing importance of localised production for critical components within major consumer markets.
It may prompt other Asian chipmakers to consider similar investments in the US, securing access to key customers and CHIPS Act incentives. While wafers will still originate in South Korea, the final packaging and testing in the US creates a more geographically distributed supply chain for advanced AI memory. This could affect future supply chain strategies and investment flows across the broader Asian semiconductor industry.
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